According to the commodity market analysis system of SunSirs, the iron ore market exhibited a divergent trend last week (August 7-14): spot prices fluctuated at low levels, while futures prices initially fell before rebounding. Although the overall price level shifted slightly upward compared to the previous week, it remained within the low range for the year. As of August 14, the SunSirs iron ore price index stood at 704.11, up 0.78% month-on-month (as shown in the chart above). Prices gradually stabilized and recovered after touching a periodic low early in the week.

Regarding inventory, as of August 14, imported iron ore stocks across 45 major Chinese ports stood at 166.182 million tonnes, a decrease of 0.8152 million tonnes from the previous period. The average daily volume of ore leaving the ports was 3.0371 million tonnes, down 0.3211 million tonnes week-on-week, while the number of vessels at port dropped by 38 to 88. These figures were primarily driven by typhoon-related port congestion and reduced arrivals—factors representing short-term disruptions rather than a fundamental shift in trends. Absolute port inventory levels remain at a historical high of 167 million tonnes, with declining end-user demand limiting overall consumption capacity. Steel mill inventories of imported ore rose slightly by 0.3834 million tonnes to 88.1127 million tonnes, though the scale of restocking remained limited. Looking at the medium term, the trend of port inventory accumulation remains unchanged. Port inventories are projected to rise by 18-25 million tonnes in the second half of 2026, potentially climbing to 192-199 million tonnes by year-end. The downward pressure exerted by persistently high inventory levels is far from being alleviated.

Regarding supply, total global iron ore shipments for the week ending August 10 stood at 32.012 million tonnes, down 1.382 million tonnes week-on-week; combined shipments from Australia and Brazil totaled 25.685 million tonnes, a decrease of 1.685 million tonnes. Australian shipments reached 17.973 million tonnes, up 621,000 tonnes, with 15.505 million tonnes destined for China—an increase of 1.213 million tonnes. Brazilian shipments totaled 7.712 million tonnes, down 2.306 million tonnes. Overall, global iron ore shipments continued their upward trend last week. While Australian shipments remain in a seasonally weak cycle, the growth rate of Brazilian shipments has turned positive year-on-year, resulting in a significant week-on-week rebound in combined shipments from the two regions. In terms of port arrivals, the impact of earlier high shipment volumes caused the total volume arriving at 47 domestic ports to surge to 32.01 million tonnes—a 21-month high. Although arrival figures dipped temporarily last week due to port congestion caused by Typhoon Dolphin, shipments currently in transit will arrive en masse once the storm passes; thus, supply pressure has merely been deferred rather than eliminated. Looking ahead to next week, while August supplies of imported ore are expected to remain relatively low on a month-on-month basis, the upward trend persists, even as the support provided by the supply side marginally weakens.

Regarding demand, as of August 14, the blast furnace operating rate at steel mills stood at 82.64% (up 0.32% week-on-week), while the blast furnace ironmaking capacity utilization rate was 89.44% (up 0.06% week-on-week). The profitability rate of steel mills rose by 1.74% to 33.77%. Average daily molten iron output increased by 1,700 tonnes to 2.382 million tonnes, whereas the daily consumption of imported iron ore at sampled steel mills fell by 2,800 tonnes to 2.9065 million tonnes. Marginal changes have emerged on the demand side. The lifting of environmental restrictions in Hebei province prompted the restart of some blast furnaces, serving as the primary driver for molten iron output stabilizing and rebounding after several consecutive weeks of decline. However, despite the slight rise in profitability to 33.77% (up 1.74%), more than two-thirds of steel mills remain unprofitable, and there has been no significant improvement in end-user demand for finished steel products. Given the persistent prevalence of losses, there is limited room for further increases in molten iron output; steel mills are primarily replenishing iron ore stocks based on immediate needs, with little appetite for proactive inventory accumulation.

Regarding the scrap steel market, the week of August 7-14 saw a trend characterized by slight upward probing and regional divergence; while the overall price level edged up, the magnitude of the increase was limited. The market is likely to continue fluctuating within a narrow range next week. Tight supply provides a floor for prices, yet weak demand constrains upward momentum. Prices are expected to hover between 2,320 and 2,360 RMB/ton (SunSirs benchmark price), with mainstream prices for heavy scrap steel ranging from 2,000 to 2,100 RMB/ton (based on East China). The Jiangxi market is expected to see minor fluctuations, the Zhejiang market is likely to experience narrow-range volatility in the short term, and the Northeast market for scrap from dismantled vehicles will likely continue its pattern of narrow-range fluctuation.

In summary, analysts at SunSirs believe that the iron ore market is influenced by a mix of bullish and bearish factors and is expected to trade with a weak, fluctuating trend. While a short-term recovery in market sentiment and macroeconomic expectations provides some support for prices, the limited improvement in finished steel supply-demand dynamics and steel mill profit margins suggests little room for a further rebound in hot metal output. Coupled with expectations of rising supply, the market is likely to remain weak and volatile in the near term, with limited upside potential. Regarding trading strategy, it is advisable to look for opportunities to short the market on rallies.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.