FX.co ★ Iron Ore Hits 5-Week High

Iron ore futures climbed toward CNY 740 per ton, nearing a five-week high, supported by elevated freight costs and expectations of pre-holiday restocking in top consumer China. Shipping rates remained high amid firm energy prices and heightened geopolitical tensions, as the United States and Iran exchanged strikes in the Middle East over the weekend, amplifying supply risks.

Market participants also expect Chinese steelmakers to rebuild iron ore inventories ahead of the National Day holidays in October, while looking for a seasonal pickup in construction activity this month. Industry data showed that average daily hot metal output — a key gauge of iron ore demand — inched higher last week after falling for two consecutive weeks.

Still, further gains in iron ore prices may be capped as profit margins at Chinese steel mills continue to deteriorate.