FX.co ★ Iron Ore Hits Fresh 4-Year Low

Iron ore futures fell toward CNY 670 per ton, their lowest level in four years, after China’s state-backed iron ore purchasing entity reached a new supply agreement with Rio Tinto, easing concerns about supply security. The China Mineral Resources Group (CMRG) verbally notified several steel mills of the deal on Wednesday, though no specific terms were disclosed. Previously, CMRG had instructed some mills to halt negotiations with Rio Tinto regarding shipments scheduled from September.

At the same time, higher global shipments and increased arrivals at Chinese ports underscored ample supply. Industry data showed that global iron ore shipments rose by 3.89 million tons week-on-week to 34.77 million tons in the week ending October 18. Combined shipments from Australia and Brazil increased by 4.79 million tons to 29.82 million tons, while iron ore arrivals at 47 Chinese ports grew by 2.73 million tons to 28.35 million tons over the same period.