22.08.202504:41:10UTC+00Iron Ore Falls on Weak Fundamentals

Iron ore futures dropped below CNY 770 per tonne as of Friday, marking a further decline for the second consecutive session amidst both demand uncertainties and abundant supply. While disruptions in steel production in preparation for China’s upcoming military parade have proven less disruptive than initially anticipated, the long-term outlook for consumption remains uncertain. This uncertainty is attributed to the underperformance in the property sector, slow-paced infrastructure developments, and an unpredictable manufacturing sector in China, the world's largest iron ore consumer. According to industry reports, as of August 21, portside inventories in China increased by 0.2% from the previous week, reaching 138.5 million tons, heightening concerns about oversupply. On the supply front, Brazil is expected to increase its shipments by 4% year-on-year by 2025, driven by enhanced mining activities and infrastructure advancements. This rise in exports to China is anticipated to offset shipments from countries such as Australia, Peru, and India. Meanwhile, although Australian exports are stable, they may encounter weather-related challenges later in the year. In India, export volumes are being limited due to strong domestic demand.