This week (June 8–12), the domestic iron ore spot market was characterized by increased supply, inventory accumulation, waning demand resilience, and a downward trend in prices. Major international mining companies entered their fiscal year-end push for volume, leading to simultaneous increases in overseas shipments and arrivals, while domestic port inventories continued to climb. Although blast furnace operating rates and hot metal output remained high, steel mill profit margins continued to shrink; coupled with the steel market entering its traditional off-season, procurement sentiment turned cautious. Meanwhile, a sharp drop in international shipping rates and easing geopolitical tensions in the Middle East further weakened cost support. Consequently, iron ore spot prices trended downward throughout the week, with market trading remaining cautious.

I. Spot Prices and Regional Market Trends

Iron ore spot prices weakened amid volatility this week, with notable price fluctuations. As of June 12, the spot quote for mainstream 60.8% Fe PB Fines at Qingdao Port stood at 774 RMB/dry ton, a cumulative drop of 7 RMB/dry ton from the start of the week; prices for 61% Fe high-grade fines also fell, touching a three-month low during the week. Futures prices tracked the spot market downward, with the main iron ore contract falling from 767.5 RMB/ton to 764 RMB/ton, recording a slight weekly decline.

Regionally, quotes across major national ports moved in tandem, and regional price spreads remained stable. At northern ports—the primary hubs for arrivals and distribution—quotes for fines, lump ore, and pellets all weakened; traders showed a strong willingness to sell, and there was more room for price negotiation on actual orders. In the steel mill clusters of East and South China, mills demonstrated a clear intent to drive down prices, focusing procurement on immediate needs while high-priced transactions virtually stalled. Due to their lower cost-performance ratio, pellet prices saw a slightly steeper decline than standard fines. Overall market speculative sentiment was subdued; traders largely adopted a "quick-in, quick-out" strategy, showing little interest in stockpiling for the medium-to-long term. II. Overseas Shipments, Port Arrivals, and Overall Supply

Global iron ore supply saw a significant increase this week. Major mining companies in Australia and Brazil entered the final push of their fiscal years, while non-major miners ramped up production driven by earlier high prices; consequently, total global iron ore shipments rose by 1.73 million tons week-on-week. Shipments from the two key producing regions—Australia and Brazil—accounted for 0.931 million tons of this increase, signaling an accelerated pace of supply release.

Boosted by increased overseas shipments, domestic port arrivals also rose. Total iron ore arrivals at 47 major domestic ports increased by 1.468 million tons week-on-week, while arrivals at the 45-port sample rose by 1.653 million tons. Notably, the six northern ports saw a significant surge in arrivals as overseas cargoes concentrated at ports, further intensifying the overall domestic supply pressure. From a long-term perspective, the push for higher volumes by overseas miners is expected to continue through June, likely keeping arrival volumes high and making it difficult to quickly reverse the loose supply landscape for domestic iron ore.

III. Port and Steel Mill Inventory Status

A clear trend of inventory accumulation emerged this week, acting as a key factor suppressing prices. As of June 12, total imported iron ore inventory across 47 ports nationwide reached 172.906 million tons, a sharp week-on-week increase of 0.9553 million tons; with port inventories rising for several consecutive weeks, the pressure from stockpiles is becoming increasingly apparent. Although the average daily volume of iron ore leaving ports (port off-take) rose slightly to 3.3869 million tons, the pace of off-take lagged behind the rate of arrivals, leading to increased port congestion.

Steel mill inventories also saw a slight build-up; total imported iron ore stocks at sampled steel mills nationwide reached 89.1113 million tons—an increase of 0.5775 million tonnes week-on-week—pushing the inventory-to-consumption ratio to 30.11 days. Steel mills currently maintain a low-inventory strategy, replenishing stocks based on daily consumption needs rather than actively stockpiling on a large scale. While the inventory increase is limited, the combination of high port stocks and ample overall market supply continues to exert downward pressure on spot prices. IV. Domestic Demand and Steel Mill Procurement Status

This week, iron ore demand was characterized by "slightly increased output but cautious procurement." Data shows that the blast furnace operating rate across 247 sampled steel mills nationwide stood at 84.25% (up 0.31% week-on-week), while the blast furnace capacity utilization rate was 90.29% (up a marginal 0.05%). Average daily hot metal output rose slightly by 1,400 tons to 2.4086 million tons. Overall blast furnace production loads remained high, providing rigid support for iron ore demand.

However, bullish factors are gradually weakening. On one hand, the steel market has entered the traditional summer off-season; end-user consumption is sluggish, finished steel prices are under pressure, and steel mill profitability continues to decline. The profit rate among steel mills fell by 3.47 percentage points week-on-week, significantly squeezing corporate production margins. On the other hand, coke prices continue to rise, driving up the composite cost of furnace feedstock and sharply increasing cost pressures on steel mills. Against this backdrop, steel mills have adopted an increasingly cautious procurement stance, adhering to a "buy-as-needed" strategy. They are reducing long-term forward bookings and limiting purchases to cover basic daily consumption, showing no willingness to actively restock or support prices; consequently, upward momentum on the demand side remains insufficient.

V. International Shipping and External Factors

The international shipping market cooled significantly this week. Freight rates for the Australia-to-Qingdao C5 route—previously at a five-year high—dropped nearly 20% during the week, falling to $13.135 per tonne by June 8. This rapid decline in shipping costs directly weakened the cost support for imported iron ore.

Meanwhile, a recent memorandum of understanding between the US and Iran has eliminated navigation risks in the Strait of Hormuz. International crude oil prices have retreated, and overall risk sentiment regarding commodities has cooled, causing the geopolitical premium on iron ore to dissipate. The external environment has shifted from strong to weak, further driving down quotes for overseas ore and creating a trend where both domestic and international markets weaken in tandem. Global iron ore supply and demand remain loose; overseas downstream demand is stable with no concentrated purchasing activity, meaning the international market is failing to transmit positive signals to the domestic market. VI. Upstream-Downstream Linkage Analysis

Upstream, overseas mines have ramped up shipments and ocean freight rates have fallen; with raw material costs easing, the upward pressure on iron ore costs has dissipated. Midstream, port inventories remain high and competition among traders to offload stock has intensified, making prices prone to decline rather than growth.

Downstream, steel and coke exert mutual constraints: multiple rounds of coke price hikes have steadily raised the comprehensive production costs for steel mills, forcing them to push for lower iron ore procurement prices. Meanwhile, weak demand during the steel off-season has capped finished steel prices; unable to pass costs on to downstream buyers, steel mills are compelled to suppress the prices of furnace feedstocks. The industry chain is locked in a negative cycle—characterized by increased upstream supply, high midstream inventories, and weak downstream profits—keeping iron ore prices under persistent pressure.

VII. Market Outlook

Iron ore prices are expected to maintain a fluctuating, bearish trend. Overseas mines continue their end-of-fiscal-year push to boost shipment volumes, and the trend of inventory accumulation at ports shows no signs of reversing. With the steel off-season persisting, steel mills face difficulties in restoring profitability and remain cautious in their procurement. However, the downside potential for prices is limited, as high blast furnace output provides a floor for support; mainstream spot prices are projected to fluctuate within the 760–780 RMB/dry ton range.

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