According to the commodity market analysis system of SunSirs, iron ore prices trended upward with some volatility last week (March 14–21; the same period applies hereinafter), exhibiting a strengthening trajectory. As of the 21st, the SunSirs Iron Ore Price Index stood at 811 points, representing a month-on-month decline of 0.5%, as illustrated in the chart above. Last week, the iron ore market displayed a pattern of slight decline and narrow-range fluctuation; while prices across the "ferrous commodities" complex generally moved within a narrow range, iron ore outperformed coal, coke, and finished steel products. The core driving factors were as follows: persistent tensions between the U.S. and Iran kept crude oil prices at elevated levels, providing a floor of support for iron ore prices via the "marginal cost pricing" mechanism; additionally, shipping rates from Brazil to Qingdao surged to $30 per ton. Concurrently, following the conclusion of earlier environmental production restrictions, a recovery in downstream demand spurred a rebound in hot metal output; steel mills initiated restocking efforts—causing inventories to cease their decline and begin rising—thereby providing tangible support for iron ore prices. However, factors such as persistently high port inventories, uncertainties regarding the sustainability of steel demand, and ongoing negotiations within the industry chain are expected to limit further upside potential. Consequently, iron ore prices are projected to maintain a pattern of narrow-range fluctuation in the short term.

Market Analysis

Regarding inventory, as of March 20, the stock of imported iron ore at 45 major ports nationwide stood at 170.984 million tons, a month-on-month decrease of 891,200 tons. The daily average port clearance volume was 3.2097 million tons, a week-on-week increase of 30,700 tons; the number of vessels currently at port totaled 103, a week-on-week decrease of 9. The status of iron ore port inventories for the past week is illustrated in the figure above. The aggregate inventory of imported iron ore held by steel mills nationwide amounted to 90.3406 million tons, a week-on-week increase of 1.0496 million tons. Last week, steel mill profit margins continued to rebound; driven by an increase in hot metal production and the release of demand for material pickup, port clearance volumes maintained an upward trend. Port inventories began to undergo destocking last week, and this destocking trend is expected to persist into the coming week; consequently, close attention should continue to be paid to changes in port-side iron ore inventory levels over the next week.

On the supply side, as of March 16, the total global iron ore shipments for the previous week amounted to 30.488 million tons—a week-on-week increase of 1.51 million tons. Total shipments from Australia and Brazil reached 24.644 million tons, up 1.223 million tons from the previous week. Australian shipments totaled 18.753 million tons—an increase of 1.221 million tons—of which 15.872 million tons were destined for China, marking a rise of 1.213 million tons. Brazilian shipments stood at 5.892 million tons, a marginal increase of 20,000 tons. Last week, shipment volumes from both Australia and Brazil continued to rise. While cyclical fluctuations in overseas shipments from Australia and Brazil were primarily influenced by seasonal factors and weather conditions—leading to short-term variations—the medium-to-long-term outlook suggests that the iron ore supply landscape remains ample. With the resumption of industrial operations following the Lunar New Year holidays and the active shipping efforts of overseas suppliers, both iron ore shipments and port arrivals are expected to rebound next week; consequently, the overall iron ore supply situation is trending toward a stronger trajectory.

Regarding demand, as of March 20, the operating rate of steel mills' blast furnaces stood at 79.78%, representing a week-on-week increase of 1.44%. The capacity utilization rate for blast furnace ironmaking reached 85.53%, up 2.61% from the previous week. The profitability rate among steel mills rose to 42.42%, an increase of 1.29% month-on-month. The daily average output of molten iron reached 2.2815 million tons, an increase of 69,500 tons compared to the previous period. As of March 20, the daily consumption of imported iron ore among the sampled steel mills stood at 2.8115 million tons, an increase of 92,000 tons. Last week witnessed simultaneous increases in both steel mill operating rates and molten iron output, while steel mill profitability continued to improve. Furthermore, improved transaction volumes for downstream finished steel products last week facilitated the release of demand from steel mills, leading to a modest increase in their profit margins. With profitability on the rise, steel mills have demonstrated increased enthusiasm for maintaining operations; consequently, it is anticipated that the demand for iron ore may see a slight uptick in the coming week.

Regarding scrap steel, prices fluctuated within a narrow range last week. The slight downward trend observed was primarily driven by the overall market dynamics of the ferrous sector. While downstream demand for finished steel products saw some recovery last week—bolstered by the continued restoration of steel mill profits and sustained high operating rates—the resulting boost to scrap steel demand was modest. Consequently, scrap steel prices retain some upside potential; although adjustments were noted in certain regions, the scrap steel market is expected to continue fluctuating within a narrow range in the coming week.

Market outlook

In summary, analysts at SunSirs anticipate that iron ore prices will continue to fluctuate at elevated levels over the coming week. On the supply side, global shipment volumes remain volatile at high levels, while arrivals at ports have increased month-on-month; this easing in resource availability is expected to exert downward pressure on prices. On the demand side, steel mills are continuing their production resumption efforts, and hot metal output is projected to rise further next week; robust, non-negotiable restocking demand remains strong, providing core support for ore prices. Regarding inventories, port stockpiles across the 47 major ports are expected to continue their downward trend, indicating that the current supply-demand balance has not yet undergone any significant deterioration. Overall, the market outlook for the upcoming period presents a complex interplay of bullish and bearish factors: while supply-side pressure has increased marginally, demand resilience persists. Given the low inventory environment, ore prices possess strong resistance to decline; however, considering that prices are already hovering at a cyclical peak—and bearing in mind the potential risk of negative feedback loops triggered by narrowing steel mill profit margins—prices are expected to primarily undergo high-level fluctuations, with limited opportunities for sustained, directional trends.

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