- Slim mill margins and soft restocking weigh on market
- Weak pre-holiday demand pulls iron ore prices lower
Iron ore fines (Fe 61%) spot prices declined by $1/dmt to $94/dmt CFR China on 28 September 2026, down from 25 September, as trading activity remained subdued ahead of the Chinese Golden Week holidays. Physical demand continued to remain weak as pre-holiday restocking activity wound down, while persistently slim steel mill margins kept buyers cautious.
China’s iron ore portside prices also softened day over day, pressured by declining finished steel prices and weak buying interest. The correction in iron ore prices was largely linked to the weakness in finished steel prices, which continued to weigh on procurement sentiment among mills.
Despite the decline, most market participants remained bearish on seaborne lump premiums in the near term. Market participants pointed to weak mill margins, poor overall market fundamentals and average lump portside prices, while expecting seaborne lump prices to weaken further, particularly with potential production cuts after the Chinese National Day holidays.
However, some market participants saw limited downside for lump premiums despite the weak fundamentals. Lump prices are facing pressure, but their direction will largely depend on demand. Compared with pellets and concentrates, lump still offers some cost advantage to mills, while import margins remain workable. This could provide some support to premiums and limit the extent of any near-term correction.
DCE iron ore futures soften
January 2027 iron ore futures on the Dalian Commodity Exchange (DCE) declined by RMB 11.5/t ($2/t) to RMB 702.5/t ($104.7/t) on 28 September against Friday last week. The futures market remained subdued amid cautious sentiment and weak spot demand ahead of the upcoming holidays. Higher crude oil prices also added volatility to freight rates, further weighing on market sentiment.
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