Since the beginning of March, the iron ore market has followed a trend of initial volatile upward movement, followed by a surge to a high point and subsequent retreat, exhibiting an overall pattern of strong volatility. According to price tracking data from SunSirs, as of the 28th, the SunSirs Iron Ore Price Index stood at 800.44 points—an increase of 4.36% month-on-month. Notably, the index reached its monthly peak of 815.11 on the 12th, marking a gain of 6.27%, as illustrated in the chart above.

Reviewing the iron ore market performance in March, the key market drivers for the month included: first, persistent tensions between the U.S. and Iran drove up crude oil prices, which, through the transmission of shipping costs, subsequently raised the landed costs of iron ore; second, a cyclone in Western Australia caused short-term disruptions to the shipping schedules of major mining operations, thereby providing temporary support to the supply side; and third, a recovery in downstream demand spurred a resumption of hot metal production, prompting steel mills to begin restocking and causing port inventories to reverse their upward trend and begin to decline. Overall, with macroeconomic sentiment and industry fundamentals reinforcing one another, iron ore outperformed both coal & coke and finished steel products.

Regarding inventory, as of March 27, the total inventory of imported iron ore across 45 ports nationwide stood at 170.0031 million tons—a month-on-month decrease of 980,900 tons. The daily average port throughput (clearance volume) was 3.1317 million tons, a week-on-week decline of 78,000 tons; meanwhile, the number of vessels temporarily at port totaled 113, an increase of 10 vessels week-on-week. The status of iron ore port inventories for the current week is illustrated in the figure above. The aggregate inventory of imported iron ore held by steel mills nationwide amounted to 89.7856 million tons, a week-on-week reduction of 555,000 tons. This month saw a recovery in steel mill profitability and an increase in hot metal production; this growth was driven by the maintenance of basic operational levels during the Spring Festival period—which had previously slowed the release of demand—thereby leading to an uptick in port clearance volumes. Port inventories began a gradual destocking process this month, primarily due to a reduction in overseas shipments. The optimization of the inventory structure suggests that the imbalance between supply and demand has not yet significantly deteriorated; however, port inventories may cease their downward trend next week, making it essential to continue closely monitoring changes in port-side iron ore inventory levels.

On the supply side, as of March 23, the total global iron ore shipments for the previous week amounted to 31.443 million tons—a week-on-week increase of 955,000 tons. Total shipments from Australia and Brazil reached 25.594 million tons, up 950,000 tons from the previous week. Australian shipments totaled 19.957 million tons—an increase of 1.204 million tons—of which 16.348 million tons were destined for China, representing a rise of 476,000 tons. Brazilian shipments stood at 5.638 million tons, a decrease of 254,000 tons week-on-week. Thus, last week saw an increase in shipments from Australia and a reduction in shipments from Brazil. Regarding the cyclical fluctuations in overseas shipments from Australia and Brazil: although a cyclone in Western Australia caused short-term disruptions to shipping schedules, the overall supply landscape remains loose. From a medium-to-long-term perspective, overseas mining operations remain active in their shipping efforts; consequently, supply-side pressure persists, and the iron ore market continues to be characterized by ample supply. Driven by rising prices, overseas suppliers remain keen to ship their products; as a result, both iron ore shipments and arrivals at ports are expected to increase in the coming week, indicating that the overall iron ore supply situation continues to trend toward strengthening.

Regarding demand, as of March 27, the operating rate of steel mills' blast furnaces stood at 81.03%, representing a week-on-week increase of 1.25%. The capacity utilization rate for blast furnace ironmaking reached 86.63%, up 1.1% from the previous week. The profitability rate among steel mills rose by 0.87% week-on-week to 43.29%. The daily average output of molten iron reached 2.3109 million tons, an increase of 29,400 tons from the previous period. As of March 27,, the daily consumption of imported iron ore among the sampled steel mills stands at 2.8459 million tons, an increase of 34,400 tons. Throughout this month, steel mill operations have remained at high levels; as profit margins trended upward, the resumption of production at steel mills continued to advance, boosting operational enthusiasm. Consequently, restocking demand was gradually being unleashed, providing tangible support for iron ore prices. It is projected that iron ore demand may see a slight increase in the coming week.

Regarding scrap steel, prices in March initially rose in tandem with iron ore before stabilizing; however, constrained by sluggish demand for finished steel products, upward momentum remained weak. Overall, the scrap steel market in April is expected to operate within a framework of "tight supply-demand equilibrium." During the early part of the month, prices may face downward pressure and fluctuate due to steelmakers' cost-control imperatives and ample supply. In the mid-to-late period—as downstream demand gradually recovers and steelmakers release their stockpiling requirements ahead of the Qingming and May Day holidays—the price center of gravity is expected to drift slightly upward amidst continued fluctuations. While a unilateral, sharp rally is unlikely, the market is more likely to exhibit a trend of "initial stability followed by gains, trending narrowly higher."

Market outlook

In summary, analysts at SunSirs anticipate that the iron ore market in April will exhibit a volatile pattern characterized by a "ceiling above and a floor below." During the first half of the month—driven by the combined effects of geopolitical risk premiums, steel mills resuming production and restocking, and the depletion of port inventories—iron ore prices are expected to demonstrate strong resilience against declines, maintaining a generally firm and fluctuating trend. However, starting in the latter half of the month—as shipments delayed by hurricanes arrive in concentrated waves, supply pressure mounts, and steel mill profit margins potentially undergo a temporary contraction—the market faces a risk of correction. Consequently, in terms of trading strategy, it is advisable to monitor for signals indicating a peak in hot metal production and a turning point in port inventory levels; traders should exercise caution when chasing rising prices and instead look to establish positions during market dips.

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