en.Wedoany.com Reported - Iron ore is the only major commodity that has not experienced significant price fluctuations during the conflict between the US, Israel, and Iran, but the market fundamentals for this key steelmaking raw material are undergoing changes.
Analyst Clyde Russell noted that China purchases about three-quarters of the world's seaborne iron ore to supply factories that produce slightly more than half of the global steel. The vast majority of China's iron ore comes from just two countries, Australia and Brazil, with small amounts imported from other nations such as South Africa and Guinea. This trade bypasses the Strait of Hormuz, which has been effectively closed to ships since the US and Israel launched airstrikes on February 28.
Since the outbreak of the conflict, iron ore prices have remained largely stable, contrasting with the volatility seen in commodities such as crude oil, refined oil products, liquefied natural gas, coal, copper, and aluminum. The trading range for iron ore contracts on the Singapore Exchange has been $14 per ton, stabilizing around $105 per ton since the start of the year. Prices rose from a low of $98.20 per ton on February 20 to a high of $111.91 per ton on May 11, as Chinese buyers feared potential shortages of marine fuel due to the effective closure of the Strait of Hormuz, before retreating to $101.65 per ton on June 10.
Price stability has been accompanied by moderate growth in Chinese imports. Customs data shows that imports in the first five months totaled 516.26 million tons, up 6.3% year-on-year. However, May imports were 97.71 million tons, down 6% month-on-month, marking a three-month low. This figure diverges from assessments by commodity analysts DBX Commodities and Kpler. DBX tracked May seaborne imports at 105.56 million tons, while Kpler estimated 106.4 million tons. Although tracking service data does not always perfectly align with customs data, a discrepancy of 8 million tons in a single month is unusual, and analysts believe it may reflect some cargoes arriving at the end of the month being carried over for customs clearance in June.
China's iron ore import performance has outpaced the steel industry, which saw production fall 4.1% in the first four months to 331.12 million tons. The gap between imports and crude steel output is partly attributed to an increase in iron ore inventories at Chinese ports, which reached a record 166.91 million tons in the week ending March 13. Since then, inventories fell to 159.09 million tons in the week ending June 5, but remain 21% higher than the 132 million tons recorded in the same period in 2025.
Another factor driving iron ore imports is the decline in both domestic iron ore production and grade. According to MySteel, China's iron ore output in the first four months was 326.8 million tons, down 1% year-on-year. This follows a 2.8% decline in 2025 output to 983.7 million tons from 1.04 billion tons in 2024. The grade of domestically produced Chinese iron ore ranges between 20% and 30%, meaning it must be processed to reach the 60% to 65% grade of imported ore, a process that is costly and energy-intensive.
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