China: Iron ore spot prices fall d-o-d amid renewed pressure on mill margins

• Weak mill margins, subdued buying weigh on sentiment
• Higher freights, unclear steel market outlook keep mills away

Iron ore fines (Fe 61%) spot prices fell by $2/dmt d-o-d to $96/dmt CFR China on 11 September 2026, reversing the gains made over the previous week. The decline came as Chinese buying remained subdued, with mills showing limited appetite for fresh cargoes amid weak margins and uncertainty over the market’s near-term direction.

Buying activity remained largely need-based, with most mills avoiding aggressive procurement and continuing to assess their margins before making fresh purchases. Large-scale restocking ahead of the long domestic holidays in October has yet to begin, while traders also remained reluctant to re-enter the market, indicating that current price levels had not yet provided enough incentive to step back into the market.

At the same time, a sharp rise in coke prices has further squeezed steelmakers’ margins, raising the possibility of production cuts if the pressure persists. This has also affected demand for lumps, with distressed mill margins limiting interest in higher-premium products despite the approaching pre-holiday restocking period.

Geopolitical developments have added another layer of uncertainty to the seaborne market. Higher crude oil prices have pushed up freight rates, increasing delivered costs for buyers and making them more cautious about fresh bookings. With both raw-material costs and freight remaining volatile, market participants are increasingly focused on reassessing margins before committing to larger volumes.

China’s iron ore portside prices continued to weaken amid cautious sentiment. However, according to some market reports, there was a modest improvement in activity at ports, while recovering import margins and ongoing inventory destocking could provide some support to buying interest in the near term.

DCE iron ore futures remain under pressure

January 2027 iron ore futures on the Dalian Commodity Exchange (DCE) declined by RMB 11/t ($1/t) to RMB 720.5/t ($108/t) on 12 September. The weaker futures market reinforced the cautious tone in the physical market, while uncertainty around upcoming seaborne cargoes, higher freight costs and continued pressure on steel mill margins kept buyers on the sidelines.