Iron ore prices in China witnessed an upward trend in July 2025

In July, the iron ore market experienced an initial period of fluctuation followed by an upward trend, then surged before declining, ultimately ending the month with a stronger overall performance. The iron ore price index rose by approximately 10.46% over the course of the month.

The first half of the month saw prices fluctuate and rise, supported by strong steel mill profitability and sustained production enthusiasm, which bolstered demand for iron ore. Additionally, market sentiment was lifted by external factors, further driving prices upward. However, as the month progressed, the seasonal slowdown in downstream demand became more pronounced. Construction activity weakened, steel transactions slowed, and some steel mills began maintenance operations, leading to a decline in molten iron production. This shift resulted in a supply increase and demand contraction, cooling market sentiment and causing iron ore prices to retreat after their mid-month surge.  However, overall, the prices were held on the higher side.

Port inventories showed mixed trends, with a slight weekly increase but a monthly decrease, reflecting strong initial demand as steel mills maintained high production levels. However, as overseas shipments recovered in the latter half of July, port inventories stabilized. Meanwhile, global iron ore shipments rose, particularly from Australia and Brazil, indicating a rebound in supply.

On the demand side, steel mills operated at high capacity for most of July due to favorable profits, but as downstream demand softened, some mills reduced output, leading to a potential decline in iron ore consumption in early August. Scrap steel prices also followed an upward trajectory, influenced by the broader strength in ferrous metals, though iron ore remained the preferred raw material for many mills.

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Looking ahead, August may see a shift in fundamentals as supply remains robust while demand weakens further due to seasonal maintenance and slower steel transactions. While steel mill profits currently support resilient iron ore demand, prices are expected to fluctuate within a narrower range, potentially rising briefly before stabilizing or declining as supply-demand dynamics adjust.