Iron ore prices rose by 2.8% in April

The average price of iron ore (KORE 62% Fe/Qingdao) rose by 2.8% in April compared to March, reaching $109.34/t CFR. As of April 24, prices stood at $110.21/t CFR, up 1.2% from the previous week.

April was a highly volatile month for the iron ore market, but the overall balance of factors remained moderately positive. At the beginning of the month, prices were supported by the resumption of steel production in China, increased blast furnace utilization, and higher pig iron output. An additional factor was high energy prices amid the conflict between the U.S. and Iran, which heightened expectations of rising costs for mining, freight, and logistics.

At the same time, the market began to correct as early as the first half of the month. Easing geopolitical tensions reduced the risk premium in commodities, and traders began to factor in a potential increase in supply more actively. The key theme of the month was BHP’s negotiations with China Mineral Resources Group. Expectations of a return to normal access for BHP’s cargoes to the Chinese market weighed on prices, as market participants priced in an increase in short-term ore availability.

Mid-April revealed the market’s dual nature. On the one hand, iron ore imports to China rose in March, shipments from major companies were recovering after weather disruptions, and port inventories remained high. On the other hand, demand from steel mills was gradually improving, and low mill inventories created room for restocking ahead of the holidays in early May. It was precisely the expectation of pre-holiday restocking that supported prices following local dips.

At the end of the month, the market received a new boost: a reduction in port inventories in China, steady blast furnace utilization, and a rise in billet prices in Tangshan to their highest levels in several months improved sentiment. At the same time, upside potential remained limited due to strong supply from Australia, Rio Tinto’s stable plans for Pilbara, and expected volumes from Simandou.

In the short term, prices may hold near current levels, but without expectations of further gains. Support will come from pig iron output and declining port inventories, while the completion of pre-holiday purchases and rising seaborne shipments may limit further increases.