Dalian iron ore futures were generally stronger today. The most-traded contract, I2605, eventually closed at 816.5 yuan/mt, up 1.81% from the previous trading session. Meanwhile, the spot price rose by about 5 yuan from the previous trading day. Traders were moderately active in offering quotes, while steel mills made relatively few inquiries. Overall spot market transactions were limited. The latest SMM survey showed that the impact of blast furnace maintenance on hot metal production was 1.751 million mt, down 250,000 mt WoW. This impact is expected to further decline by 229,800 mt next week to 1.522 million mt. As blast furnace maintenance intensity gradually eases, iron ore demand is expected to show signs of rebounding in the short term. Looking ahead, although current port iron ore inventory has reached 155 million mt, the overhang is mainly concentrated in certain varieties. Overall, market demand for some high-demand varieties has seen a structural shift. In particular, varieties represented by IOCJ fines and PB lumps continued to destock rapidly, while MAC fines and Indian fines saw an inventory buildup. The structural contraction on the supply side is expected to lend favorable support to iron ore fundamentals in the short term. Therefore, iron ore prices are expected to fluctuate at highs or remain relatively strong this week.

This week, ferrous metals rebounded from the bottom. At the start of the week, coking coal and coke led the futures higher, mainly driven by rising crude oil prices in the overseas market, which pushed the energy and chemicals sector stronger accordingly; mid-week, both the U.S. and Iran signaled a more relaxed stance toward war, easing geopolitical tensions, while coal prices fell in tandem, weakening the cost-side logic, and ferrous metals fluctuated at highs; in the latter half of the week, worsening short-term liquidity issues in BHP's iron ore port inventory triggered stronger iron ore prices in the overseas market, while the Middle East situation remained volatile, reinforcing cost support and pushing ferrous metals higher again. In the spot market, supported by futures, end-user and arbitrage purchase sentiment both improved WoW this week......

World Steel Association data shows India produced 15.1 million tonnes of crude steel in January 2026, a 10.5% increase year-on-year. This robust growth contrasts with a 6.5% decline in total global production, highlighting India's role as the primary driver of iron ore demand outside of China.

Dalian iron ore fluctuated upward today, with the most-traded contract I2605 finally closing at 787.5 yuan/mt, up 0.90% from the previous trading session. Meanwhile, spot prices rose 2-3 yuan from the previous trading day. Traders were moderately active in offering quotations, while steel mills made inquiries. Overall spot market transactions were sluggish. An SMM tracking survey showed that the operating rate of blast furnaces at 242 steel mills was 85.99% this week, while daily average hot metal production reached 2.3514 million mt, down 36,400 mt WoW. Multiple steel mills in Hebei underwent concentrated maintenance due to safety and environmental protection inspections, and the maintenance cycles were relatively short. Therefore, the decline in iron ore demand was more pronounced this week. Looking ahead, given that maintenance cycles for most blast furnaces were relatively short, the intensity of maintenance is expected to gradually ease in the later stage, and daily average hot metal production is expected to rebound quickly, with iron ore demand likely to improve next week. Overall, iron ore is likely to remain in the doldrums in the near term.

DCE iron ore futures fell before rising, stabilizing in the afternoon session. The most-traded contract I2605 finally closed at 784 yuan/mt, up 0.26% from the previous session. Meanwhile, spot prices fell 2–5 yuan from the previous trading day. Traders showed average enthusiasm in quoting prices, and steel mills’ purchases were mainly for rigid demand. Overall, the spot market saw scant transactions. According to SMM survey tracking, blast furnace maintenance intensity continued to increase this week, with the impacted volume up 102,100 mt WoW to 1.9892 million mt. Iron ore demand was currently at a relatively low level. As blast furnaces that underwent earlier maintenance resumed production in a concentrated manner, hot metal production was expected to rebound next week, and iron ore demand was likely to improve. On the macro front, the war in the Middle East remained in a stalemate. Surging crude oil prices pushed up the ocean freight rate and the cost of imported iron ore, providing cost support for ore prices. However, due to limited actual transactions, upward momentum showed signs of weakening. Therefore, in the short term, ore prices might mainly see sideways movement within a range.

DCE iron ore rose in an N-shaped pattern, and the most-traded contract I2605 finally closed at 784.5 yuan/mt, up 2.28% from the previous futures session. Meanwhile, the spot price rose by 5-15 yuan from the previous trading day. Traders were moderately active in quoting, and steel mills’ procurement was mainly driven by rigid demand. Overall spot market transactions were average. This week, both iron ore supply and demand weakened. SMM’s total global iron ore shipments came in at 27.84 million mt, down 7.01 million mt MoM, a decline of 20.1%. Shipments from Australia and Brazil fell notably last week due to cyclones, while shipments from South Africa, India, and other countries also declined. China’s total iron ore arrivals were 23.07 million mt, down 1.21 million mt MoM, a decrease of about 5%. In addition, blast furnace production resumptions were progressing relatively slowly, leading to weak iron ore demand. However, given structural tightness in some iron ore resources and rising transportation costs, downside support for ore prices remained relatively solid. Therefore, iron ore prices were expected to fluctuate upward this week, mainly in both the overseas market and domestic market.

I. Supply-Demand Pattern Shift Puts Iron Ore Prices on a Downtrend In 2021, driven by inflation expectations from global quantitative easing, frequent supply-side disruptions in Brazil and Australia, resilient demand in China, and strong speculative sentiment, iron ore prices hit a record high of $219.77/mt in July that year, with Platts’ annual average price as high as $160/mt ; they then entered a prolonged downtrend. In 2025, the annual average iron ore price was $102, down about 36% from the 2021 average. Source: SMM Iron ore prices have continued to fall in recent years, mainly due to the global project investment boom spurred by high prices before 2021. After 2024, multiple large iron ore projects worldwide entered a concentrated commissioning phase, and the market’s supply-demand pattern shifted from tight to loose, with the supply-demand gap widening from -12 million mt to 46 million mt. Meanwhile, China has implemented crude steel production cuts since 2022, significantly curbing iron ore demand. Coupled with persistent weakness in real estate, an overall downturn in the steel industry, and an overseas economic slowdown, among other factors, iron ore demand declined markedly. Entering 2025, a rebound in China’s steel exports drove iron ore demand to increase slightly, while capacity in emerging steel-producing countries such as Southeast Asia was gradually released, narrowing the supply-demand gap somewhat. Over the long term, however, iron ore supply is still on a growth trend, market expectations remain bearish, and prices are pressured to set new lows repeatedly. Source: SMM (the forecast assumes an extreme balance under normal commissioning of new mines and no voluntary production cuts by mines) II. Mine Costs Form a Solid Bottom Support for Iron Ore Prices From the global iron ore cost curve, about 90% of global mine cash cost is no higher than $85/mt, and about 93.8% is no higher than $90/mt. International mining giants represented by FMG, BHP, Rio Tinto, and Vale have costs far below those in China and other non-mainstream countries, forming the main body on the left side of the cost curve in the chart—low and relatively flat—which explains their strong cost competitiveness and earnings resilience in the global market. At present, the $85-90 cost line is the lifeline for the vast majority of mines; once prices remain below this range for an extended period, high-cost capacity will be forced to exit, thereby supporting prices. China’s iron ore mines due to low raw ore grade and high underground mining costs, among other reasons, currently have a nationwide per-mt processing cost of about 595 yuan/mt, equivalent to around $85 . Its costs have long been at the high end globally, serving as the "anchor point" and "ceiling" of the cost curve. The high cost and low production of China's domestic iron ore mines have led the steel industry to heavily rely on imports for raw materials, and fluctuations in international ore prices directly impact the profit stability of the domestic steel industry. Therefore, promoting domestic resource supply, investing in low-cost overseas resources, and developing steel scrap recycling are crucial for the strategic security of China's steel industry. Data source: SMM III. The global iron ore supply has long been characterized by a landscape dominated by the "Big Four" mines, supplemented by "non-mainstream" mines. Currently, the iron ore production industry is highly concentrated, primarily following a pattern dominated by the "Big Four" mines, supplemented by "non-mainstream" mines. Australia and Brazil have long contributed over half of the global iron ore production. Australia, leveraging advantages such as high resource concentration, low mining costs, and stable supply, firmly holds its position as the world's largest producer and exporter; while Brazil is renowned for its high-grade ore and is the world's second-largest iron ore exporter. Data source: SMM The "Big Four" mines, consisting of Rio Tinto, BHP, FMG, and Vale, have long dominated global iron ore supply, accounting for approximately 70% of global production. Data source: SMM The Rise of Emerging Mines Promoting the Multipolar Development of Global Iron Ore In recent years, India has actively promoted domestic mining development, leading to a significant increase in production; since 2023, its iron ore production has surpassed that of China, and it shows a continuous expansion trend, maintaining an annual growth rate of 7%, gradually becoming a new force in regional supply growth. Emerging enterprises such as India's National Mineral Development Corporation (NMDC) and South Africa's Anglo American are gradually expanding capacity, enhancing their influence in the international market. Meanwhile, countries such as Russia, Kazakhstan, Iran, and regions in Africa are also actively developing domestic iron ore resources, seeking to increase their voice in regional markets, driving the global iron ore supply landscape from high concentration towards gradual multipolar development. Data source: SMM IV. Australia Firmly Holds the Top Spot, India Becomes a New Growth Engine From the perspective of major producing countries, Australia still firmly ranks first globally, with iron ore production of approximately 900 million mt in 2025, accounting for one-third of the global total, and maintaining a stable annual growth rate of about 2%. Brazil ranks second; after the 2019 dam collapse, production once fell sharply. Although it has recovered somewhat over the past two years, the increase has been relatively limited. China’s production scale is relatively large, but due to frequent safety incidents and the continued impact of the environmental protection-driven production restriction policy, production has not increased but instead declined in recent years. By contrast, India, as an emerging producer, has seen production rise steadily over the past decade, and is expected to post an increase of about 7% by 2030. Source: SMM V Over the next three years, the world will usher in a new peak in mine commissioning In addition to supply from existing mines, there are currently multiple large-scale iron ore projects under construction worldwide, with the number of mines expected to be commissioned in 2026 at six, mainly located in Africa and Brazil. Representative projects include Vale’s northern expansion “S11D +20mtpa,” the northern block of Guinea’s Simandou iron ore project, and the Nimba iron ore project. 2026 will be the year with the most concentrated new supply over the next three years. With the northern block of Simandou officially commencing production, the overall capacity ceiling of the mining area will, with capacity ramp-up, rise to 120 million mt, becoming the core incremental source of global iron ore supply over the next five years. From 2027 to 2028, projects expected to commence production will mainly come from China, including the Xi’an Mountain iron ore mine and the Honggenan iron ore mine, adding about 25 million mt of iron ore supply to the domestic market. Overall, as emerging producers continue to release capacity, and traditional suppliers such as Australia and Brazil consolidate their export advantages through expansion projects, the global iron ore supply structure will become more diversified. A new cycle of capacity release has gradually begun, and the loose supply landscape is expected to continue deepening over the next several years. Source: SMM Simandou Project Commissioning Reshaping the Global Iron Ore Supply Landscape Among the many new projects, Africa’s Simandou iron ore is particularly noteworthy. The mine is expected to reach annual capacity of 120 million mt, and the ore’s average grade exceeds 65%, providing the market with a high-grade, high-quality option beyond Australia and Brazil, and becoming an important variable in the recent contest over the global iron ore supply landscape. In terms of project progress, the Simandou iron ore project has entered a substantive shipment phase; as logistics corridors are gradually opened up, the mining area’s substantive impact on global supply will gradually become evident. Source: SMM Nearly 400 million mt of Capacity Release by 2030, Global Iron Ore Market Faces Impact With the entry of emerging producers, iron ore supply is beginning to diversify. Projects led by Simandou iron ore are breaking the industry landscape and taking the iron ore market into a new stage. Looking ahead to the next five years, global iron ore capacity is expected to see a wave of concentrated releases, with incremental supply mainly coming from two major regions: Africa and Australia . Leveraging the development of new high-grade mines such as Simandou, Africa is reshaping the global supply landscape; meanwhile, Australia, relying on its existing capacity base and ongoing expansion projects, is further consolidating its export-dominant position. Overall, the global iron ore supply landscape is evolving toward greater diversification and a looser market. Source: SMM VI Simandou High-Quality Iron Ore Enters the Market; Global Iron Ore Enters an Era of “Quality Upgrading” As some older mines gradually enter a period of resource depletion , coupled with the fact that many newly commissioned projects are dominated by mid- to low-grade ore, the average global iron ore grade shows a downward trend from 2025 to 2026 . However, as high-grade mines such as Simandou are commissioned one after another, the share of high-grade ore supply is expected to increase, and is projected to drive a rebound in the overall global iron ore grade in 2027. Source: SMM VII “Green Steel” Reshapes the Global Crude Steel Production Landscape From a policy perspective, the low-carbon transition represented by “green steel” is profoundly reshaping the global crude steel production landscape . Whether in China or Europe, carbon neutrality has become the core theme for the future development of the steel industry. Therefore, whether it is China’s ongoing capacity replacement policy or the EU’s Carbon Border Adjustment Mechanism (CBAM) that is about to be fully implemented , both clearly indicate that the global steel industry is accelerating its transition toward low-carbon and green development. Achieving carbon neutrality across the entire industry chain is no longer an isolated task for a single link, but must rely on close upstream-downstream coordination and deep integration of technological pathways. Source: SMM Technology Reshaping: Green Iron Supply + Green Production Demand Against the broader backdrop of carbon neutrality, merely maintaining the current supply-demand structure dominated by iron ore can no longer meet future low-carbon requirements. The deeper need of industry transformation lies in reconstructing metallurgical processes: resource-rich countries—such as Australia and Brazil, traditional major iron ore exporters—need to fully leverage their renewable energy endowments and mineral advantages, shifting from simply exporting iron ore to producing high-grade, low-carbon-footprint direct reduced iron (DRI) or hot briquetted iron (HBI) and other high value-added intermediate products. By shipping this clean-energy-driven “green DRI” to steel consumption hubs and integrating it with local green electric arc furnace (EAF) processes, it can effectively replace the traditional “blast furnace–converter” long process, thereby substantially reducing carbon emissions at the source. This multinational collaborative model of “high-quality resources + green energy + short-process” is not only a critical measure to address trade barriers such as the Carbon Border Adjustment Mechanism, but also an essential pathway to build a new global green steel supply chain and drive deep decarbonization across the industry. Data source: SMM Rising Share of Electric-Furnace Steelmaking, Stronger Substitutability of Steel Scrap, Squeezing Iron Ore Demand Driven by carbon-neutrality targets, the steel industry, as a major source of carbon emissions in the industrial sector, has drawn close attention for its emissions-reduction pathway. Among these, the traditional long-process route centered on “blast furnace–converter,” due to its heavy reliance on coke and iron ore, is regarded as a primary source of carbon emissions and has therefore become a key focus of regulation and retrofitting in various countries. By contrast, the short-process route represented by “steel scrap–electric furnace,” with a significantly lower carbon-emissions intensity, is being favoured by an increasing number of countries. This structural shift has driven the share of electric-furnace steelmaking in global crude steel production to continue rising. Data source: SMM From an economic perspective, the substitution relationship between steel scrap and pig iron is typically measured by the price spread. Generally, after factoring in steelmaking costs and losses, pig iron costs should be about 100-150 yuan/mt higher than steel scrap prices ; this range is viewed as the cost-performance equilibrium band: if steel scrap prices are lower than pig iron costs by more than this threshold, steel scrap is more economical; otherwise, pig iron has a more pronounced advantage. In 2025, the average price spread between pig iron and steel scrap was 122 yuan/mt, lower than the 2024 average of 211.8 yuan/mt, and also largely within the cost-performance equilibrium band. By contrast, the 2024 spread was significantly above the upper limit of the equilibrium band, indicating that steel scrap offered a more prominent cost-performance advantage at that time. After the spread narrowed in 2025, the economic advantage of steel scrap weakened somewhat. As a result, in the short term, there is limited room for China to increase the share of electric-furnace steelmaking; overall, it remains at a relatively low level and still lags far behind the global average. This also reflects that, at the current stage, cost factors still impose a substantive constraint on the choice of smelting process routes. Data source: SMM Taken together, the blast furnace–converter long-process route will remain the dominant model for global steel production over the next five years, but the shares of electric furnaces and steel scrap usage will increase year by year; in the long run, this trend will suppress iron ore demand, causing it to weaken gradually. Data source: SMM VIII Global Total Iron Ore Demand in 2030 to Be About 2.4 Billion mt, with Gradual Shifts in Global Flows As China began encouraging domestic steel mills to develop overseas markets while adjusting the domestic industry chain’s transformation toward producing high value-added products needed by the manufacturing sector, global crude steel production began to rebound gradually. Data Source: SMM From the perspective of the global demand structure, although crude steel production outside China is entering a new round of development, with capacity expansion particularly notable in regions such as India and Southeast Asia, a considerable portion of the incremental increase comes from electric furnace processes, providing limited substantive boost to iron ore demand. Meanwhile, as the world’s largest iron ore consumer, China’s crude steel production has entered a downward trajectory, constituting the primary source of demand-side reductions. Overall, overseas increments are unlikely to fully offset China’s reductions. It is expected that by 2030, total global iron ore demand will be approximately 2.4 billion mt, with overall growth trending toward a slowdown. Compared with the mild growth on the demand side, the supply side remains in a phase of continuous expansion. The oversupply landscape will become an important factor that suppresses ore prices over the long term. Data Source: SMM SMM will continue to track the impact of changes in iron ore supply and demand on prices. Comments are welcome—scan the code to follow us! Data Source Statement: Except for publicly available information, all other data are processed and derived by SMM based on publicly available information, market communication, and SMM’s internal database models, for reference only and not constituting decision-making advice. Scan the code to access information for free

DCE iron ore held up well today and dropped back slightly before the close. The most-traded contract, I2605, finally closed at 772 yuan/mt, up 1.38% from the previous trading session. The spot price rose 10-15 yuan from the previous trading day. Traders were moderately active in quoting, while steel mills made fewer inquiries. Spot trading sentiment was subdued. According to SMM statistics, total iron ore inventory at 35 major ports nationwide stood at 154.8 million mt, down 590,000 mt MoM, indicating a slight destocking trend. Over the same period, the daily average port pick-up volume rebounded to 2.55 million mt, up 145,000 mt MoM, suggesting a faster pace of port shipments. Demand improved slightly. The core logic supporting iron ore prices is gradually shifting from macro demand to structural contradictions on the supply side. Market concerns over structural shortages of certain mainstream mid- to high-grade ore types are fermenting, and these expectations have strengthened bullish sentiment, providing solid bottom support for prices. Looking ahead, the market is expected to see a tug-of-war between supply and demand in the short term. On the one hand, based on the production schedule, enforcement of blast furnace maintenance is expected to strengthen next week, which will create a phased restraint on immediate iron ore consumption. Against this backdrop of weaker demand, the aforementioned structural tightness on the supply side may be temporarily less apparent. However, once this round of concentrated maintenance ends and blast furnaces resume production as planned, iron ore demand is set to warm up in the short term. Driven by a rebound in demand, the structural shortage contradiction on the supply side will quickly stand out as the market’s main trading logic, and iron ore prices are expected to, overall, hold up well at that time.

Today, the Dalian iron ore futures showed a strong trend, with the most-traded I2605 contract closing at 754.5 yuan/mt, up 0.87% from the previous trading session. Spot prices rose by 4-8 yuan/mt compared to the previous trading day. Traders' enthusiasm for quotations was moderate, and steel mills purchased as needed with limited inquiries. Overall, the spot trading atmosphere was mediocre. From a fundamental perspective, March marks the first full month of post-holiday resumption of work and production, and the recovery in end-use demand will drive a gradual increase in steel consumption. As a result, pig iron production at steel mills is also expected to see some growth. It is worth noting that during the first week after the holiday, the willingness of steel mills to restock was generally weak, focusing mainly on depleting existing in-factory inventory. By entering March, in-factory inventories have dropped to relatively low levels, coupled with an increase in hot metal production, it is expected that overall iron ore demand will show a more noticeable recovery. Macro perspective, with the Two Sessions approaching in early March, as the first major meeting of the '15th Five-Year Plan', there are positive expectations regarding policy direction and monetary arrangements. Market sentiment leans optimistic, which is generally beneficial for iron ore. In terms of news, the escalation of geopolitical tensions in the Middle East brings significant uncertainty and risks. Although the Middle East is not a core production area for iron ore, the rise in crude oil prices is expected to directly translate into higher freight premiums for Brazilian and Australian iron ore arriving in China (CFR), thereby increasing the cost of iron ore imports and supporting prices. However, in the long term, this may drag down steel exports and squeeze steel mill profits, thus weighing on ore prices. Therefore, in the short term, iron ore prices are likely to follow a pattern of rising first and then falling.

This week, ferrous metals were in the doldrums. On the first day after the holiday resumption, due to the impact of overseas risk events during the long holiday—primarily the US's plan to impose new tariffs on approximately six industries (including large batteries, cast iron and iron fittings, plastic pipes, industrial chemicals, as well as power grid and telecommunications equipment) and the escalation of US-Iran tensions—overall sentiment fluctuated significantly, and ferrous futures also touched recent lows. Mid-week, with some steel mills in the Tangshan area receiving notifications for voluntary emission reductions during the Two Sessions, coupled with Shanghai's adjustment of housing purchase restrictions and rumors of favorable real estate policies during the Two Sessions, futures rebounded from lows, showing significant sector resonance effects. However, as the weekend approached, no new favorable policies emerged, and futures retreated once again.