In May, iron ore prices first rose and then fell. A favorable macroeconomic environment and increased demand for iron ore contributed to higher prices. However, average daily hot metal production exceeded 2.35 million tons and market concerns caused prices to fall again.
According to SteelRadar's assessment, Chinese iron ore prices fell by 2.42% to USD 124 as of May 31.
Steel demand seasonally weakened in June. The capacity of steel mills to continue production was limited. Average daily hot metal production remained at high levels, weakening the demand-side factors supporting iron ore prices.
On the supply side, the proportion of Australian and non-mainstream minerals shipped to China has increased and supply volumes remain at very high levels. Under this supply and demand structure, it will be difficult for ports to significantly deplete their inventories in June, which will weigh on the market.
However, the fact that steel demand is in the off-season suggests that the weight of real-world transactions is low. Further increases in molten iron are expected after June and July.
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