- Expectations of restocking demand provide support
- Higher coke, energy costs supporting market sentiment
Iron ore fines (Fe 61%) spot prices rose by $1.1/dmt d-o-d to $99.7/dmt CFR China on 31 August 2026, reaching over one-month high. The gain was supported by improved trading of medium-grade blend fines, firmer ferrous sentiment and expectations of restocking demand, although overall activity remained relatively thin.
Portside trading in China has improved in recent days, particularly for blend fines, as more favourable import margins have encouraged buying of prompt cargoes. The recovery has been more pronounced in blend fines than mainstream products, narrowing price differentials across brands.
Higher iron ore futures also supported the physical market amid a broader rally in ferrous commodities. A sharp rise in Chinese coking coal prices and expectations of a possible fourth round of coke price hikes further strengthened the cost outlook. Higher energy and freight costs amid escalating US-Iran tensions, along with an improvement in China’s manufacturing PMI, provided additional support.
However, physical fundamentals remained mixed. Steel mills continued to assess whether higher raw material costs can be absorbed, particularly as steel prices have not kept pace with iron ore, coking coal and coke. Further increases in input costs could squeeze mill margins and limit procurement appetite.
Mills remained cautiously positive, with the focus shifting towards steel product prices and policy signals. Any deterioration in steel demand or renewed margin pressure could weigh on iron ore prices.
DCE iron ore futures ease amid cautious sentiment
January 2027 iron ore futures on the Dalian Commodity Exchange (DCE) declined by RMB 7.5/t w-o-w to RMB 719.5/t ($107/t) on 31 August. The decline reflected cautious buying sentiment despite firmer physical market conditions, as participants remained watchful of steel demand and margin sustainability.
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