Iron ore slid again on Tuesday to its lowest level in more than two years. The most traded contract on China’s Dalian Commodity Exchange fell 1.19 percent to 662 yuan, about $99.25, a metric ton in early trade, Reuters reported, while the benchmark November contract on the Singapore Exchange dipped below $90 a tonne, its weakest since late September 2024. Bloomberg also reported the two year low the same morning.
The demand side is the driver. Chinese steel mills are running thin margins, seasonal steel demand is cooling, and port inventories are high enough to make mills cautious about restocking. Average daily hot metal production, the standard proxy for blast furnace iron ore consumption, fell 0.5 percent week on week to 2.32 million tonnes as of October 22, according to consultancy Mysteel, the lowest reading since late March. China’s prolonged property downturn continues to cap demand for construction steel.
Supply is moving the other way. Industry data compiled by Shanghai Metals Market showed global iron ore shipments rising 2.8 percent week on week to 33.45 million tonnes in the week ending October 23, with shipments bound for China up 9.5 percent to 22.75 million tonnes, and fourth quarter supply is expected to rise further as the major miners hold or lift shipments. BMI has cut its forecast for the 2026 average iron ore price to $95 a tonne from $99, which frames the move as a repricing of the balance, not a one day dip.
There is a counterweight, and it comes from inside the industry. Vale chief executive Gustavo Pimenta has argued that soaring energy and freight costs have pushed roughly 10 percent of global seaborne supply, about 160 million tonnes a year, into loss making territory, with about 15 million tonnes of capacity already idled. If that cost curve reading is right, sustained prices below $90 should force curtailments that support the price, though Pimenta offered no timing.
The equity tape has not followed the commodity down today. BHP rose 1.64 percent to $79.13 and Rio Tinto rose 0.36 percent to $83.72 in the latest market tables, though both are down 4.91 percent and 6.46 percent respectively on the week, and copper miners and gold miners also bounced about 1 percent on the day. The divergence is a one day bounce inside a weak week for the diversified miners, whose earnings remain geared to the iron ore price that is still falling.