Iron ore prices rose to an 18-month high in early January

Iron ore prices have risen significantly since the beginning of 2026, reaching nearly two-year highs. As of January 12, May futures on the Dalian Commodity Exchange (DCE) stood at $117.92/t, up 4.4% from December 31 and the highest in the last 18 months. On the Singapore Exchange, February contracts rose 3.5% over the same period to $109.2/t, the highest level since October 2024.

The beginning of 2026 for the iron ore market was characterized by a sharp improvement in price dynamics against the backdrop of a combination of seasonal, fundamental, and speculative factors. The key driver of growth was the intensification of pre-holiday restocking by Chinese metallurgical plants ahead of the Lunar New Year. Expectations of a resumption of blast furnace operations and an increase in pig iron production bolstered demand for raw materials and supported both the spot and futures markets.

Prices were supported by stable margins for metallurgical companies and rising prices for coking coal and coke. This increased investor interest in the raw materials segment and boosted futures trading on the Dalian Exchange, which became a key benchmark for market sentiment.

At the same time, the fundamental picture remained mixed. On the one hand, there was a slight reduction in sea shipments from Australia and Brazil, as well as a seasonal decline in domestic mineral production in China. On the other hand, port stocks in China remained high, and overall supply in the sea market was sufficient, which periodically limited further price growth and provoked corrections.

The market paid particular attention to news about the resumption of supplies of certain Australian materials, in particular Jimblebar fines from BHP, which signaled a gradual easing of logistical and commercial restrictions. The macroeconomic backdrop was also moderately positive, with signals from the People’s Bank of China regarding soft monetary policy helping to stabilize expectations in the infrastructure and industrial sectors.

In the short term, iron ore prices are likely to remain supported by pre-holiday demand and growth in pig iron production. At the same time, high port inventories and the expected expansion of maritime supply may hold back further growth, creating the risk of a correction after the holidays. In the medium term, the market will remain sensitive to the dynamics of steel production in China and the balance between supply and demand.