Strong Demand from China Boosts Iron Ore Prices in July
Iron ore prices surged in July 2025, reaching their highest levels since February. September futures on the Dalian Exchange rose to $112.74 per ton by July 21, marking a 14% gain since the start of the month. Meanwhile, August contracts on the Singapore Exchange climbed 11.3% to $103.6/t, reflecting broad market optimism.
This rally in iron ore prices was largely fueled by China’s announcement of a 1.2 trillion yuan hydropower project in Tibet. The massive infrastructure plan, involving five hydro plants totaling 60 GW, sparked renewed hopes for sustained steel demand. Increased futures trading and stronger physical deals followed the announcement, especially in long steel segments.
Moreover, China’s steel industry maintained robust production despite the typical summer slowdown. Stable pig iron output and reduced portside ore inventories confirmed consistent buying from mills. Some plants even resumed operations ahead of schedule, reinforcing supply-side confidence.
Iron Ore Prices Face Policy Risks Despite Upward Momentum
Despite the surge, iron ore prices experienced brief corrections during July. Chinese government signals on structural steel sector reforms raised concerns about future demand. The Ministry of Industry’s statement on phasing out outdated steel capacities prompted profit-taking and slight pullbacks in futures.
Still, analysts believe fundamentals remain supportive. Export volumes from key suppliers have eased, and China’s Politburo may soon unveil fresh infrastructure stimulus. If confirmed, new projects could extend iron ore demand strength through Q3 2025.
Market watchers remain cautiously optimistic. Moody’s forecasts iron ore prices to average $80–100/t over the next 12–18 months due to a global supply glut and moderated Chinese consumption. Similarly, BMI Research maintains a $100/t average price forecast for 2025, citing ongoing demand risks despite recent price spikes.
SuperMetalPrice Commentary:
Iron ore’s mid-2025 rebound signals market sensitivity to China’s infrastructure policy and production outlook. While the Tibetan hydropower project boosted sentiment, the sustainability of demand hinges on broader stimulus execution and steel sector reforms. Prices may stay volatile in Q3, balancing optimism around megaprojects with caution over capacity cuts and softening global demand. Traders and miners should closely monitor China’s policy announcements and port stock levels as leading indicators.
Leave a Reply
You must be logged in to post a comment.