Iron Ore Prices Hold Ground Amid Chinese Steel Cuts and Supply Risks
Iron ore prices stayed relatively flat in August 2025, despite a month marked by high market volatility. January futures on the Dalian Commodity Exchange settled at $107.9/t, up a marginal 0.2%, while October contracts on the Singapore Exchange closed at $101.35/t, down just 0.4%. This reflects a market holding steady between Chinese steel output restrictions and supply-side risks.
The shutdown of blast furnaces in key Chinese steel hubs like Tangshan and Henan led to a sharp drop in sintering activity. This government-mandated action, prompted by environmental policies and preparations for a military parade in Beijing, cut iron ore demand significantly in mid-August. As a result, prices came under pressure during the first half of the month.
However, optimism returned in late August. News of a temporary suspension of Guinea’s massive Simandou project raised concerns over future high-grade ore availability. Combined with speculation about a possible U.S. Federal Reserve rate cut, investor sentiment improved, momentarily lifting prices on the Singapore Exchange above $104/t.
Outlook for Iron Ore Prices in September 2025
Mixed indicators continue to shape iron ore price trends heading into September 2025. On the bullish side, blast furnaces are expected to restart following China’s parade, temporarily boosting demand. Meanwhile, China Iron and Steel Association (CISA) data showed stronger pig iron and crude steel production in August.
Yet, the upside remains limited. Traders face downward pressure from high inventories of finished rolled products and ongoing weakness in China’s construction sector. Analysts expect the price range to remain narrow, fluctuating between $100–105/t, depending on how quickly demand rebounds and whether new steel restrictions emerge.
Looking further ahead, Moody’s forecasts iron ore prices to average $80–100/t over the next 12–18 months, citing global oversupply and fading Chinese demand. Similarly, BMI Research maintains a 2025 average forecast of $100/t, acknowledging the structural headwinds in the market.
SuperMetalPrice Commentary:
Iron ore prices in August 2025 showcased the market’s delicate balancing act between supply uncertainty and weakening demand. China’s environmental mandates remain a swing factor, capable of disrupting both consumption and sentiment. The Simandou project, though paused, still looms large as a supply gamechanger. SuperMetalPrice anticipates continued sideways trading in the short term, with macro signals from China and Guinea holding the key to any breakout. For now, iron ore markets appear stable but fragile, reflecting the complex dynamics of a market in flux.
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