- Ample supply, thin steel mill margins weigh on market
- Selective buying emerges as lower prices boost demand
Iron ore fines (Fe 61%) spot prices declined by $1.6/dmt d-o-d to $93.7/dmt CFR North China on 3 August 2026. China’s seaborne iron ore market remained under pressure at the start of the week as weak steel mill margins, cautious buying, and abundant cargo availability continued to weigh on sentiment. However, some market participants observed the emergence of selective buying interest as lower spot prices began attracting value-based purchases.
While overall demand in the seaborne spot market remained subdued, weaker prices encouraged some buyers to re-enter the market. Steel mills, however, continued to adopt a cautious procurement strategy, with one mill source stating that producers are waiting for prices to decline further as margins remain under pressure, particularly for low- and medium-grade iron ore.
As per reports, some recent fixed-price transactions were driven more by speculative buying than by genuine demand. Seaborne prices have corrected more sharply than domestic port prices, potentially improving trading margins if the trend continues. Despite these developments, concerns persisted over the large availability of blend fines cargoes in the seaborne spot market, limiting the scope for any meaningful price recovery.
Meanwhile, iron ore prices at Chinese ports also declined sharply amid weak macroeconomic sentiment and shrinking steel mill profitability. Spot market liquidity remained limited as buyers delayed purchases in anticipation of further price declines. The ongoing production cuts and maintenance at steel mills continue to suppress raw material demand and keep the near-term outlook cautious.
DCE iron ore futures stable: Iron ore futures on the Dalian Commodity Exchange (DCE) for September 2026 remained stable d-o-d at RMB 697.5/t on 4 August.
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