The most-traded iron ore contract on China’s Dalian Commodity Exchange closed daytime trade on Thursday down 3.12 percent at 682.5 yuan ($101.84) a metric ton, its weakest level since April 9, 2025. The benchmark November contract on the Singapore Exchange gave up early gains to trade 0.16 percent lower at $91.30 a ton, having hit $90.95 on October 5, its lowest since September 2024, for a 1.2 percent loss over China’s October 1 to 7 break. Bloomberg reported Friday that the weekly drop was extending on excess supply and weak demand.
The demand side is deteriorating visibly. Only around 7 percent of Chinese steelmakers were operating at a profit by end-September, and average daily hot metal output, the standard gauge of iron ore demand, slid to a six-month low of 2.34 million tons, according to Mysteel data. Some steelmakers have started or planned equipment maintenance as losses deepened. Steel benchmarks on the Shanghai Futures Exchange lost ground as inventories of major steel products accumulated during the holiday, with rebar down 1.77 percent.
Supply is not the problem. Portside inventories are swelling as overseas shipments recover, Chinese port stocks are at elevated levels, and falling freight rates amid easing energy prices have removed a layer of cost support. Traders are watching the Fourth Plenary Session in late October for any policy signal, but broker First Futures summed up the read: profitability among steelmakers remains under pressure while ore supply is expected to increase. For the miners, this is the backdrop Fortescue already flagged in its September-quarter update: a cash pile cut by the China procurement standoff, and a market priced for demand destruction rather than restocking.