SMM, July 30: Iron ore futures continued to drift lower during the day session on July 30, closing down again and fully reflecting the dual bearish pressure from macro headwinds and fundamentals. Earlier macro tailwind expectations gradually fizzled out, and combined with a sharp increase in supply and persistently weak downstream demand, iron ore futures faced a double blow. By the close of the day session on July 30, iron ore extended its losing streak to a fifth consecutive trading day, falling 3.31% to 715 yuan/mt, with an intraday low of 712.5 yuan/mt—a new low since early July 2025. Fundamentals Supply: Weather disruptions outside China fade, port arrivals surge, and supply pressure climbs significantly Chart: SMM 35-port Inventory (10kt) Data Source: SMM In terms of supply: According to SMM shipping data, total global iron ore shipments tracked by SMM reached 27.82 million mt last week, down 10% WoW; cumulative shipments were up 1% YoY. Shipments from Australia and Brazil both edged down slightly, while shipments from non-mainstream countries fell WoW, though shipments from India and Peru rebounded notably. Meanwhile, total China iron ore port arrivals tracked by SMM surged to 30.32 million mt last week, up 54% WoW, with cumulative arrivals up 5% YoY. As weather disruptions outside China gradually recede, port arrivals rebounded markedly, and the supply growth weighed on ore prices. Demand: Off-season compounded by environmental protection-driven production restrictions, hot metal output continues to pull back, and raw material demand support weakens In terms of demand: Environmental protection-driven production restrictions and the traditional off-season effect pushed China’s hot metal output down to a low for the year, and iron ore continued to face pressure from downstream demand. According to an SMM survey, on July 29 the operating rate of blast furnaces at 242 steel mills stood at 88.93%, down 0.47 percentage point WoW. Average daily hot metal output at the sampled mills was 2.4087 million mt, down 16,000 mt WoW. The decline in hot metal output this week was mainly due to disruptions from environmental inspections, especially in the Tangshan area of Hebei, where mills arranged concentrated short-term maintenance, leading to a temporary output reduction. Inventory: Port inventories saw a buildup, with a clear pattern of strong supply and weak demand Chart: SMM Ten-Port Inventory Data (10kt) Data Source: SMM In terms of inventory: As of July 30, according to SMM monitoring data, total inventories at the ten ports tracked by SMM stood at 106.92 million mt, up 1.29 million mt WoW, with coarse fines, concentrate, lump ore, and pellets all showing a slight inventory buildup. The inventory buildup at ports further confirmed the current pattern of strong supply and weak demand, continuing to suppress iron ore market prices. Market outlook for iron ore, in the short term, supply-side growth pressure continues to be released, and the pattern of weak demand during the traditional off-season for downstream end-users is unlikely to reverse quickly. Before significant improvement in construction activity and finished steel consumption, iron ore prices will overall remain in the doldrums. Subsequently, focus will be on tracking the strength and rollout pace of end-use demand recovery during the traditional September-October peak season. From a medium and long-term perspective, the iron ore market in H2 2026 will continue to see an oversupply pattern, with fundamentals weakening QoQ and ore prices still having the possibility of hitting bottom further. However, the escalating US-Iran conflict has pushed up energy costs, driving up ocean shipping costs, which will provide bottom support for iron ore prices. Overall, barring any significant macro or fundamental positive news, the oversupplied fundamentals will prevent iron ore from staging a trend reversal rebound, while the downside room is limited, keeping prices in a pattern of consolidating on a subdued note with insufficient upward momentum and cost-based downside support. Institutional Views A research report from Everbright Futures showed: Australian miner MinRes released its Q2 2026 operational report. The report showed that iron ore production at the Onslow Iron project in Q2 reached 8.754 million mt, up 12% QoQ and 42% YoY; shipments reached 9.596 million mt, up 33% QoQ and 66% YoY, setting a quarterly shipment record. Iron ore shipments from the Pilbara Hub project in Q2 were 2.701 million mt, up 31% QoQ and 7% YoY. For FY2026, MinRes's attributable iron ore shipments reached 29.543 million mt, setting an annual record. Combined with Rio Tinto and Vale's quarterly reports having previously confirmed high production and sales from major mines, the medium-term supply ample pattern was further cemented. On the demand side, hot metal output continued its decline, and low steel mill profits dampened raw material purchase willingness. Ore prices are expected to continue to consolidate on a subdued note in the short term. SDIC Futures stated: Supply side, global shipments pulled back MoM and were weaker than the same period last year. BHP and workers have yet to reach an agreement on pay raises, but currently there are no further strike plans; future attention remains on negotiation progress. China's port arrivals fell below the year-to-date average but were still stronger than the same period last year; port inventories stabilized and rebounded after weather disruptions ended. Demand side, apparent steel demand in the off-season was weak; the proportion of profitable steel mills continued to decline from low levels, leading to more production cuts; hot metal output continued to fall, and iron ore demand faced marginal downside pressure. External geopolitical conflicts persist, keeping oil prices consolidating at a relatively high level and providing some cost support for futures. SDIC Futures expects iron ore futures to consolidate. Yide Futures believes: Hot metal production is gradually declining, while the seasonal decline in supply is not pronounced, resulting in insufficient marginal supply-demand improvement and continued high inventory pressure. Although 730-710 offers some support, end-use demand has not yet emerged from the off-season, and there is insufficient momentum for a rebound. Recommended reading:

Today, the iron ore futures market trended weaker. The most-traded I2609 contract on the DCE closed at 739 yuan/mt, down 0.27% from the previous trading session. Spot prices at Qingdao port fell by 1-3 yuan/mt from the previous trading day. Traders were fairly active in offering, while steel mills mainly purchased on a rigid demand basis, resulting in weak overall spot trading sentiment. Short-term iron ore demand dipped marginally, but is expected to grow from next week. According to an SMM survey, the blast furnace capacity utilization rate among sampled steel mills was 88.90%, down 0.59 percentage points MoM. The daily average hot metal production of sampled steel mills was 2.4087 million mt, down 16,000 mt MoM. Next week, as environmental protection restrictions are lifted, most blast furnaces under maintenance will gradually resume production, and pig iron production is expected to enter a growth trajectory. However, limited by the high iron ore inventory itself and uncertainties in the market outlook, short-term iron ore prices are expected to struggle to break through overhead resistance and may continue to move sideways. [SMM Steel]

Ferrous metals showed slight divergence this week, with coking coal outperforming while iron ore, coke, and coil and rebar were generally weaker, and iron ore led the decline. During the week, news of the U.S.-Iran conflict fluctuated, but the market...

This week, iron ore futures consolidated on a subdued note, with fundamentals showing a supply-demand both weak pattern. Affected by typhoon weather, iron ore port arrivals dropped sharply by 21%, while hot metal output also pulled back slightly, and the destocking pace of port inventories narrowed. During the week, the US-Iran conflict once pushed up crude oil prices, but since shipments had already declined significantly since July, ocean freight rates only moved sideways, having limited impact on the iron ore cost side. Demand side, end-use demand remained persistently weak, steel mills' shipments were sluggish, and the pace of steel inventory buildup expanded, suppressing steel mills' raw material purchase willingness, with spot prices falling under pressure. Chart: MMI 61% Port Spot Index Source: SMM This week, domestic iron ore concentrates prices were largely stable. By region, prices in Tangshan, Qian'an, and Qianxi in Hebei edged down by 1-5 yuan/mt; prices in Chaoyang, Beipiao, and Jianping in western Liaoning were mostly stable; east China rose by 1-5 yuan/mt. The delivered price, tax included, for 66% grade iron ore concentrates in the Tangshan area closed at 980-985 yuan/mt, with mines and beneficiation plants mostly operating as planned. In the Chengde area, affected by previous heavy rainfall, open-pit iron mines have mostly resumed production recently, but underground mines and beneficiation plants and some large open-pit mines remain in a shutdown state; other areas also experienced short-term production halts, keeping China's overall resource supply still tight. Demand side, local steel mills had some maintenance expectations, and hot metal output may gradually decline, weakening support for iron ore demand. Currently, sellers and buyers are locked in a game, keeping iron ore concentrates prices generally stable. Chart: Imported Ore Prices Strengthened, Price Spread Between Imported and Domestic Ore Narrowed Slightly Outlook for Next Week Imported ore: Looking ahead to next week, the Tangshan area will initiate a new round of environmental protection-related controls during key periods. Under the shutdown and production restriction requirements for regional steel mills, the decline in hot metal output may exceed expectations, and iron ore demand will decline further. The supply side is expected to rebound: there is room for growth in overseas shipments, and port arrivals will rebound after the typhoon impact fades, port inventories are likely to shift to inventory buildup, with supply pressure gradually rising. However, considering the Politburo meeting is about to be held, the market's expectations for more bullish economic policies in H2 have heated up, and sentiment may boost ore prices, with a possibility of a short-term slight rebound. Overall, with fundamentals under pressure and macro expectations heating up interacting, iron ore prices are expected to remain mainly in a consolidate pattern next week. Domestic ore: Looking ahead to next week, some regions have expectations for domestic ore production resumptions, and domestic concentrates output may rebound slightly, but overall resources remain tight; demand side, environmental protection inspections are intensifying, maintenance expectations are rising for some steel mills in North China, and hot metal output is expected to continue its downward trend. The short-term market is in a weak supply-demand pattern, and China's iron ore concentrate prices are expected to consolidate on a subdued note next week.

Iron ore concentrates prices in the Tangshan area are relatively stable, with 66% grade iron ore concentrates, dry basis delivered price, tax included, at 980-985 yuan/mt. Local mines and beneficiation plants are mostly producing normally as planned. In the Chengde area, mines and beneficiation plants were previously affected by heavy rainfall. Recently, most local open-pit iron mines have resumed normal production, but underground mines and beneficiation plants, as well as a few individual large open-pit mines, are still suspended, and overall local resources remain tight. Demand side, local steel mills are expected to have some maintenance, and overall hot metal output may decline, weakening support for iron ore demand, and the local market is in a situation of both weak supply and demand. Overall, local iron ore concentrates prices are expected to remain stable in the short term. [SMM Steel]

Iron ore futures trended weaker today. The most-traded DCE I2609 contract closed at 739.5 yuan/mt, down 1.00%. Spot prices at Qingdao Port fell about 4-8 yuan/mt from the previous trading day. Traders' quoting enthusiasm was moderate, and steel mills were in a rather wait-and-see mood. As of now, spot transaction volumes were moderate. According to the latest SMM survey, the blast furnace capacity utilization rate among sample steel mills was 89.49%, down 0.50 percentage point WoW. Their daily average hot metal output was 2.4247 million mt, down 13,500 mt WoW. Although the intensity of environmental protection-driven production restrictions fell short of expectations, hot metal output is still expected to continue its downward trend. Meanwhile, environmental protection and safety inspection factors have not yet subsided, and some steel mills may arrange temporary maintenance. Overall, blast furnace hot metal output is likely to continue declining in the near term, and iron ore demand is expected to remain weak. Therefore, iron ore prices are expected to consolidate with a bearish bias in the near term. [SMM Steel]