Iron ore prices this week fell following new Chinese economic data, which indicated a sharp decline in crude steel production, signaled further troubles in the country’s property sector.
Iron ore futures declined as much as 1.6% on Tuesday following China, the biggest metals user, after releasing a batch of mixed economic data. Although overall economic growth was better than expected, the latest statistics reported easing domestic demand and lingering doubts about the health of the export market.
China’s crude steel production fell sharply in June, down 9.2% from the same period last year to 83.2 million tons, the sharpest single month drop in almost a year. Therefore, steel output for the first half of 2025 recorded an all-time low since 2020.
Steel and iron ore futures had risen last week on hopes of Beijing tightening policy support. This followed the government guarantees to deal with overcapacity and ruthless competition in the industry.
However, China’s real estate sector remains under strain, as housing prices continued to fall in all the cities that were polled. The National Bureau of Statistics officials conceded that there was a need for additional measures to support the sector.
A few of the steelmakers have started releasing their initial financial results, with minor margin gains from lower raw materials costs. They are still in the red, though, in most cases. Angang Steel Co. posted a first-half loss of 1.14 billion yuan, while Maanshan Iron & Steel Co. also warned of financial losses.
“The steel industry saw some improvement compared to the same period last year,” Angang stated on Monday, “However, the market situation of supply exceeding demand has not fundamentally changed.”
Singapore-traded iron ore futures lost 0.7% and settled at $98.92 a ton when the news was released. Chinese exchanges lost ground too, as Dalian-traded iron ore and Shanghai steel contracts both edged lower.
The pressure was also transferred to base metals. Copper on the Shanghai Futures Exchange declined by as much as 0.8%, battling against reducing U.S. import demand and economic uncertainty in China. Copper on the London Metal Exchange, on the other hand, increased by 0.3% to $9,645.50 per ton, nickel by 0.5%, and zinc by 1.2%.
Reference:
Bloomberg. (2025, July 16). Iron ore falls as China data shows steel, property sector woes. LiveMint. https://www.livemint.com/market/commodities/iron-ore-falls-as-china-data-shows-steel-property-sector-woes-11752638804469.html.
