FX.co ★ Iron Ore Pressured by Rising Supply

Iron ore futures dropped below CNY 810 per ton, reaching a two-week low following the arrival of the first shipment from Guinea's vast Simandou mine in eastern China over the weekend, with a second shipment having left Guinea at the end of last year. These shipments have notably increased supply, pushing port inventories in China to approximately 155 million tons, the highest level recorded since April 2022. Production from the Simandou project is projected to increase, potentially reaching up to 120 million tons of high-grade ore. On the demand front, official data indicates China's steel production fell by over 4% to roughly 961 million tons in 2025, marking the lowest annual output since 2018. The property sector's weakness persisted, with a continued decline in new home prices in December.