Iron ore futures in Singapore are on track for their lowest month-end close in four years, weighed down by ample global supplies and persistent weakness in Chinese demand. The steelmaking raw material hovered near $91 a ton, bringing its losses for October to more than 2%. This marks the seventh month this year that futures have posted a decline, extending a downward trajectory that began after prices peaked at $111.60 in May, interrupted only by a brief recovery in August.
Steel mills across China, the world’s leading consumer of iron ore, continue to face severe profitability pressures driven by sluggish domestic consumption and rising coking coal costs. Data from industry consultancy Mysteel show that roughly 11% of monitored mills were profitable during the latest tracking week, a sharp drop from 45% during the same period last year. Average weekly pig iron output, a key indicator of raw material demand, also registered a decline.
Compounding these demand pressures, inventories at Chinese ports have continued to accumulate. Figures from SteelHome indicate that port stockpiles rose 1% over the latest week, leaving supplies 15% higher compared to the same time last year. Market analysts note that demand is expected to remain subdued through the remainder of the year, as November and December traditionally mark the slowest seasonal period for steel consumption in China.
On the supply front, Brazilian mining giant Vale SA reported that its third-quarter production fell below market estimates, hampered by operational challenges at a northern Brazilian site. Despite the quarterly shortfall, the company maintained its full-year production guidance between 335 million and 345 million tons.
In midday trading, iron ore futures in Singapore edged down 0.1% to $91.25 a ton, while futures contracts on the Dalian Commodity Exchange also moved lower. Conversely, Chinese coking coal futures registered gains during the session.
