Iron ore futures experienced a significant decline on Monday, driven by disappointing property data from China, the world’s largest consumer of the commodity. Concerns surrounding the demand outlook have intensified, compounded by ongoing global trade tensions. The most actively traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) fell by 1.14%, closing at 778.5 yuan ($107.55) per metric ton. Similarly, the benchmark April iron ore on the Singapore Exchange dropped 2.29%, reaching $101.6 a ton.
The latest data reveals that China’s new home prices declined in February, contrary to expectations, despite the government’s implementation of various stimulus measures. Additionally, new construction starts, often viewed as a barometer for steel demand, saw a staggering 29.6% decrease compared to the previous year, following a 23.0% drop in 2024. This decline, coupled with increased uncertainty around hot metal output—another crucial indicator of iron ore demand—has pressured prices for this vital steelmaking component. Analysts at Jinrui Futures have indicated that mild recovery in hot metal production is expected this month, but it may lead to a buildup of portside inventories in the coming weeks.
Reports suggest that Chinese steelmakers have been exercising greater restraint in production thus far in 2025, even in the face of relatively attractive profit margins. This self-discipline appears to be a response to the heightened pressures stemming from escalating trade conflicts, particularly following new tariffs introduced by U.S. President Donald Trump. In the first two months of 2025, China’s crude steel output fell by 1.5% from the previous year, according to official data released on Monday. Other steelmaking inputs, such as coking coal and coke, also saw declines, with prices down 1.85% and 1.22%, respectively.
Meanwhile, most steel benchmarks on the Shanghai Futures Exchange weakened, with rebar and hot-rolled coil losing 1.23% and 1.17%, respectively.