Prices for iron ore rose in early September amid expectations of a recovery in demand

In early September 2025, the iron ore market showed moderate growth after an unstable end to August. Despite significant fluctuations during the first seven days of the month, the overall trend was positive: January futures on the Dalian Commodity Exchange (DCE) rose 0.3% to $110.44/t, while at the beginning of the period, quotes started at $107/t. On the Singapore Exchange, October contracts rose 1.4% to $104.95/t.

The main pressure on the market at the start of the month was caused by restrictions on steel production in China ahead of the military parade on September 3. In a number of regions, particularly in Hebei and Henan provinces, factories reduced pig iron output by 30-50%, and some blast furnaces were shut down, leading to a decline in ore consumption and a fall in prices on September 1. Quotations then fell to $107/t in Dalian and $101.3/t in Singapore.

However, after the parade ended, the market received a signal to recover: companies gradually restarted blast furnaces, pig iron production increased, which strengthened the price of ore. Quotations rose steadily between September 2 and 4. Even despite weak data on rolled steel consumption and inventory accumulation, expectations of a recovery in demand after the lifting of restrictions supported prices.

The macroeconomic background was an additional driver. The growing likelihood of a key rate cut by the US Federal Reserve boosted optimism in commodity markets. In addition, the market actively discussed possible restrictive measures for the Chinese metallurgical industry, which may include new restrictions on steel production in order to avoid overproduction. Despite doubts about the realism of these rumors, the very fact of their circulation stimulated positive expectations and supported spot prices.

At the end of the first week of September, prices stabilized above $105-110/t. However, market participants remain cautious: ore stocks in Chinese ports are growing faster than expected, and demand for steel in the construction sector remains weak.

In the short term, the iron ore market is likely to remain volatile. On the one hand, the expected recovery in seasonal demand for steel and the stabilization of blast furnace production may support prices in the range of $100-110/t. On the other hand, the risks of oversupply and new restrictions by the Chinese government may put pressure on the market again. The most likely scenario is that prices will remain balanced at around $105/t with minor fluctuations depending on macroeconomic and industry signals.