FX.co ★ Iron Ore Drops on Higher Shipments

Iron ore futures have dipped below CNY 790 per ton, reaching their lowest level in nearly a month. This decline follows Rio Tinto's announcement of record production and strong shipments in the last quarter of the previous year. As the world’s leading iron ore supplier, Rio Tinto reported a 7% increase in shipments, totaling 91.3 million tons. This growth was fueled by exceptional output from their Pilbara operations and efficient rail and port logistics. Furthermore, the company commenced exports from its newly developed Simandou mine in Guinea and anticipates sales of between 5 million and 10 million tons by 2026. On the demand front, an explosion at a steel plate factory in China's Inner Mongolia region has raised concerns regarding stricter safety regulations that could potentially impact demand for raw materials. Additionally, official data indicated a more than 4% decline in China’s steel output, falling to approximately 961 million tons by 2025, marking the lowest annual production since 2018. The property sector continues to exhibit weaknesses, with new home prices continuing to decline in December.