FX.co ★ Iron Ore Drops Ahead of China Holiday

Iron ore futures dropped to approximately CNY 782 per ton on Monday, marking a three-week low. This decline is attributed to reduced restocking by steel mills in anticipation of China’s National Day holiday and the expectation of decreased activity. Additionally, the price decrease was influenced by escalating port inventories and an increase in supply from Australia. Notably, in the previous week, iron ore prices also saw a decline following news that the European Commission intends to impose tariffs ranging from 25% to 50% on Chinese steel imports and associated products in the near future. This initiative aims to restrict imports and shield domestic producers as global overcapacity continues to erode profit margins, while Western countries strive to protect their strategic manufacturing capabilities. Concurrently, China is planning to restrict new capacity to tackle oversupply and the resulting price depression.