Dalian iron ore hits 15-month low on thin steel margins

Dalian iron ore prices plummeted to a 15-month low on Thursday, the first business day after a week-long Chinese holiday, due to uncertainty surrounding demand amid faltering steel margins. The most actively traded iron ore contract on China’s Dalian Commodity Exchange (DCE) decreased by 1.85% to 691.5 yuan ($103.19) per metric ton, marking the lowest level since June 2025.

Some Chinese steel manufacturers either initiated or intended to carry out equipment maintenance as losses intensified, according to a survey conducted by consultancy firm Mysteel on Wednesday. Experts at broker First Futures highlighted in a note that profitability for steel producers is still under strain, while ore supply is anticipated to rise.

Only approximately 6.9% of Chinese steelmakers managed to generate profits by the end of September, with the average daily hot metal output, a measure of iron ore demand, dropping to a six-month low of 2.34 million tons, as per Mysteel data. Low freight rates resulting from declining energy prices further battered prices of the crucial steelmaking component, according to analysts.

Despite the decline in Dalian iron ore, the benchmark November iron ore on the Singapore Exchange managed to rise by 0.93% to $92.3 per ton as of 0153 GMT, after slipping 1.2% during China’s holiday break from October 1 to 7, when Chinese stock markets were closed. The December iron ore contract had reached its lowest since September 2024 at $90.95 on October 5.

Coking coal and coke, other essential steelmaking inputs, climbed by 2.73% and 1.23%, respectively. Steel benchmarks on the Shanghai Futures Exchange, on the other hand, experienced a decline. Rebar tumbled by 1.06%, hot-rolled coil decreased by 0.91%, and stainless steel slipped by 1.28%.