- Expectations of improved steel demand support market
- Weak finished steel prices keep mills cautious about iron ore procurement
Iron ore fines (Fe 61%) spot prices increased by $1.10/dmt d-o-d to $98.15/dmt CFR North China on 26 August 2026, supported by expectations of stronger steel demand in September and October.
Steel demand is expected to improve in September-October as construction and infrastructure activity typically picks up during these months following heavy rains and high temperatures during July-August. This is expected to boost mill operating rates and iron ore consumption.
Prices of medium-grade fines have gained momentum since the start of the week. Secondary-market PBF trades were concluded at narrower discounts, while improved portside demand provided additional support, despite cargoes continuing to face negative landing margins.
However, sentiment remained cautious as buying interest from Chinese mills stayed limited. D-o-d declines in finished steel prices prompted mills to adopt a wait-and-see approach and restrict procurement.
Market sentiment is therefore mixed. Expectations of seasonal demand recovery in September and October are supporting prices, while weak steel margins and cautious mill procurement continue to cap buying interest.
DCE futures remain stable as market sentiment stays cautious
January 2027 iron ore futures on the Dalian Commodity Exchange (DCE) edged up marginally by RMB 1/tonne (t) ($0.2/t) to RMB 717/t ($107/t) on 26 August. Sentiment in the futures market was mixed, with expectations of stronger steel demand in September and October providing support, while weak finished steel prices and cautious buying by Chinese mills limited further upside.
Outlook
Prices may remain volatile through the rest of August as expectations of stronger September-October steel demand compete with weak finished steel prices and cautious mill buying.
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