Coking coal supply tightening, coupled with improving demand, has propelled iron ore futures to strongly reclaim the USD 100 per ton mark.

Rafael Barcellos, Head of Metals, Mining, and Pulp & Paper Equity Research at Bradesco BBI Latin America, noted in a research report last week that his team had previously forecast the bottoming-out of iron ore prices—and the current price movement is now validating that call. He expects the rebound trend to continue, supported by firm cost-side fundamentals and steadily improving downstream conditions. Meanwhile, London copper futures hit a record high of USD 14,530 per ton on Monday, reflecting broadly bullish sentiment across the metals sector. Tightening coking coal supply lifts steelmaking costs; steel prices surge to multi-month highs The immediate catalyst for this iron ore rebound stems from tightening coking coal supply. In his report, Rafael Barcellos pointed out that constrained coking coal supply is effectively supporting steel prices, with rebar and hot-rolled coil both rising to multi-month highs. Strengthening steel prices, in turn, improve steelmakers’ profit margins and transmit upward support to upstream iron ore. From a supply-demand fundamentals perspective, iron ore inventories continue to decline, spot trading activity among Chinese steel traders has risen for two consecutive weeks, and steelmakers’ profit margins have also recovered—multiple indicators collectively point to a marginal improvement in market sentiment. However, blast furnace utilization rates have declined for two consecutive weeks, adding some uncertainty to this recovery narrative and suggesting that a substantive, broad-based demand recovery has yet to fully materialize. Positive demand signals emerge downstream; manufacturing PMI provides corroboration Beyond cost-side support, positive signals are also emerging on the demand side. Rafael Barcellos cited China’s August manufacturing Purchasing Managers’ Index (PMI) as another encouraging economic indicator, believing it helps reinforce market expectations of seasonal downstream demand recovery.

Analysts suggest iron ore prices may be approaching an inflection point—what information does this convey?

Recent volatility in black commodities has intensified, and iron ore—as a core raw material—has its futures-spot price spread structure frequently regarded as a ‘thermometer’ of market expectations. As of August 19, 2026, according to the latest monitoring data from BusinesSociety, the basis of the front-month iron ore futures contract stood at -CNY 5.44 per ton, meaning futures prices remain above spot prices—continuing the negative basis (futures premium) structure observed since late May. Weak spot prices yet resilient futures—what underlying supply-demand realities and expectation-driven dynamics does this reflect? This article draws upon official data from the past three months to outline the true landscape of the iron ore futures and spot markets. I. Data Overview: Iron Ore Futures and Spot Price Chart (Past Three Months) Key data points (May 22, 2026 – August 19, 2026): II. Data Interpretation: Three Key Features Revealing Market Structure Feature One: Spot price center oscillates downward From CNY 779.33 per ton on May 22, spot prices fluctuated downward to CNY 706.56 per ton on August 19—a decline of approximately 9.3% over three months. Although minor rebounds occurred (e.g., mid-to-early July), the overall downtrend remains clear, reflecting weakening support for raw material prices from end-user demand—particularly in real estate and infrastructure—and sluggish port inventory digestion. Feature Two: Futures maintain persistent premium (negative basis) structure On most valid trading days within the observation period, front-month futures prices consistently exceeded corresponding spot prices. This indicates that the futures market continues pricing in a relatively optimistic—or cost-supported—forward scenario. Even during periods of spot price declines, futures prices proved more resilient, revealing an ongoing divergence between expectation-driven, financially influenced pricing and on-the-ground industrial reality. Feature Three: Basis fluctuations follow an ‘expansion–recovery’ cycle The front-month basis widened from -CNY 12.67 in late May to a peak of -CNY 35.33 on July 24—the largest futures premium observed—before gradually recovering to -CNY 5.44 by August 19. Such extreme basis expansion typically coincides with the most acute tension between market expectations and physical reality, while subsequent basis recovery reflects the process through which futures and spot prices re-establish equilibrium.

Iron Ore Set for Weekly Gain Despite Weak China Steel Demand

Sep 17, 2026

Iron ore futures rose for a third day despite weak Chinese steel demand, prompting the China Iron and Steel Association to urge inventory cuts amid oversupply. Analysts suggest miners may push to structurally lower prices due to sector losses.

bloomberg

2026-09-17

Iron Ore Set for Weekly Gain Despite Weak China Steel Demand

Iron Ore Set for Weekly Gain Despite Weak China Steel Demand

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