Price trend

According to the commodity market analysis system of SunSirs, the iron ore market experienced a fluctuating downward trend last week (May 29–June 5); futures prices broke through previous support levels, and the overall price center shifted lower. As of June 5, the SunSirs iron ore price index stood at 752.11 points, down 2.27% (as shown in the chart above). Last week, ore prices followed a pattern of "breaking support and fluctuating while seeking a bottom." On June 4, the main contract fell below the key support level of 767 RMB/ton, accompanied by an increase in open interest of 21,700 lots, indicating significant downward pressure exerted by the accumulation of short positions. While the ferrous metals sector faced general pressure, iron ore recorded the steepest decline among raw materials, signaling that expectations for the off-season are dominating market sentiment.

Regarding inventory, as of June 5, imported iron ore stocks at 45 major Chinese ports stood at 164.8111 million tonnes, an increase of 0.8501 million tonnes from the previous period; the average daily volume of ore leaving the ports was 3.216 million tonnes, down 0.0065 million tonnes week-on-week; and the number of vessels at port was 121, an increase of two. Total imported iron ore stocks at steel mills nationwide reached 88.5338 million tonnes, up 0.1483 million tonnes week-on-week. A key shift occurred in inventory trends this week: port stocks reversed from a decline to a rise. As of June 4, stocks at the 45 ports totaled 164.8111 million tonnes (up 0.8501 million tonnes), while the average daily outflow was 3.216 million tonnes (down 0.0065 million tonnes). Stocks at 47 ports rose by 0.7867 million tonnes to 171.9507 million tonnes. Imported ore inventories at steel mills also increased by 0.1483 million tonnes to 88.3538 million tonnes. Driven by expectations of rising supply and weakening demand, the turning point toward inventory accumulation at ports has essentially been confirmed, and inventory pressure is set to gradually return. Yide Futures noted that "iron ore prices are constrained by high inventory levels, causing them to underperform relative to other commodities."

Regarding supply, as of June 1, total global iron ore shipments for the previous week stood at 33.74 million tonnes, a week-on-week decrease of 4.284 million tonnes; combined shipments from Australia and Brazil totaled 28.262 million tonnes, down 3.065 million tonnes week-on-week. Shipments from Australia amounted to 19.456 million tonnes (down 2.59 million tonnes), with 15.494 million tonnes destined for China (down 3.037 million tonnes). Shipments from Brazil totaled 8.806 million tonnes, a decrease of 0.475 million tonnes. Shipments from both Australia and Brazil contracted further last week. While global shipment volumes retreated slightly week-on-week, the absolute level remains high. Latest data shows global iron ore shipments at 33.74 million tonnes (down 4.284 million tonnes) and combined shipments from Australia and Brazil at 28.262 million tonnes (down 3.065 million tonnes). However, port arrivals continue to rise, with 25.659 million tonnes arriving at 45 major ports—an increase of 1.44 million tonnes week-on-week. From a broader perspective, global iron ore supply is expected to see a significant surge in June. Major mining companies are entering their fiscal year-end volume-push phase, non-mainstream miners retain the incentive to boost output driven by high prices, and the pace of shipments from the Simandou project continues to accelerate; consequently, overall supply pressure is set to intensify further compared to May.

Regarding demand, as of June 5, the blast furnace operating rate at steel mills stood at 83.94% (down 0.2% week-on-week), and the capacity utilization rate for blast furnace ironmaking was 90.24% (down 0.11% week-on-week). The profitability rate of steel mills was 59.31% (down 3.03% week-on-week); average daily molten iron output was 2.4072 million tonnes (down 0.0028 million tonnes week-on-week); and the daily consumption of imported iron ore at sampled steel mills was 2.959 million tonnes (down 0.0053 million tonnes week-on-week). Signs of marginal weakening in demand emerged this week. As of June 4, the average daily molten iron output across 247 steel mills was 2.4072 million tonnes (down 0.0028 million tonnes week-on-week); the blast furnace operating rate was 83.94% (down 0.2 percentage points week-on-week); and the profitability rate of steel mills was 59.31% (down significantly by 3.03 percentage points week-on-week). With molten iron output retreating slightly from the high of 2.41 million tonnes and steel mill profitability contracting markedly—compounded by downstream steel consumption entering the off-season—there is extremely limited room for further growth in molten iron output. The Zhengxin Futures Research Institute noted that "molten iron output remains high but is showing marginal weakness, and the potential for demand growth is limited."

Regarding the scrap steel market, the period from May 29 to June 5 was characterized by overall stability with localized adjustments; prices remained steady in most regions, while some areas saw mixed movements, with fluctuations generally ranging from 10 to 30 yuan per tonne. Supply remained tight due to constraints involving tax invoices and seasonal factors, while demand faced pressure from the off-season and steel mills operated with thin profit margins. In the short term, the market is in a range-bound pattern—constrained by both a ceiling and a floor—making significant upward or downward movement difficult. In the medium term, the market is expected to undergo a weak consolidation throughout June; with both supply and demand remaining sluggish, the overall price level may drift slightly lower.

Market Outlook

In summary, analysts at SunSirs observe that the iron ore market experienced a volatile decline this week (May 29–June 5), with the main contract falling below previous support levels. Key developments include a shift from declining to rising port inventories, confirming an inflection point for stock accumulation; a slight pullback in hot metal output from its peak, signaling that demand has topped out; and the ongoing impact of the off-season, fostering bearish market sentiment. Iron ore prices are currently in a transitional phase, shifting from a scenario of "strong fundamentals" to one of "weak expectations," as the combined pressures of increased supply, peaked demand, and inventory accumulation rapidly materialize. Looking ahead to next week, as the traditional off-season for steel deepens, iron ore prices are likely to remain volatile with a downward bias, and the overall price level is expected to drift lower.

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