Iron ore drops to 2-year low on weak demand

A weakening outlook for global steel demand and rising raw material supply toward the end of the year are deepening selling pressure across commodity markets. Benchmark iron ore futures contracts traded in Singapore dropped 1.4% intraday to $89.25 per ton, falling to their lowest level in more than 2 years.

Why did iron ore prices fall?

This low reached in Singapore futures marked the lowest intraday price recorded since September 2024. As the selloff rippled across Asian markets, iron ore contracts traded on China's Dalian Commodity Exchange similarly fell to their lowest level in the last 2 years.

How is Chinese steel demand affecting the market?

Both contracting demand and expanding supply are driving the pullback in prices. China, the world's largest steel producer and consumer, is approaching a period of seasonally weak steel demand. As consumption slows, an increase in shipment volumes delivered to the market by mining producers through the end of the year is adding to pressure on prices.

Global macro risks are also accompanying the market's downward trend. Elevated oil prices keep concerns over the global economy's overall growth outlook alive, while demand stagnation in the steel sector leaves catalysts to support a potential price recovery in iron ore extremely limited.

This content is for information purposes only and does not constitute investment advice.