Iron ore has tumbled to its cheapest level in over a year, with benchmark contracts in Singapore sliding to $94.10 a tonne as traders weigh weaker Chinese steel demand and growing uncertainty around a major physical market participant. The drop extends a run of three consecutive monthly declines, the longest such streak in more than a year.
Monday’s intraday slide reached as much as 1.9% in Singapore, the lowest level since early July 2025, according to Bloomberg. In Dalian, the most active Chinese iron ore contract fell by almost 3%. The benchmark 61% Fe grade lost 1.6%, changing hands at $94.35 a tonne.
Part of the market pressure reflects worries about Radiant World, one of the larger private iron ore traders. Bloomberg reported that Vitol Group and Cargill Inc. have reportedly halted cooperation with the company over concerns about potentially false invoices. Intesa Sanpaolo and Jefferies Financial Group’s Point Bonita fund were also said to be reviewing their exposure.
– These reports are extremely untrue – Radiant World said.
Trust is as important as supply
So far, there are no visible signs of disruption to physical deliveries. Bancy Bai, an analyst at Horizon Insights, said the spot market has not shown clear anomalies. Commodity trading, however, relies heavily on credit relationships, liquidity and counterparty credibility, so even unconfirmed reports can quickly make buyers and financiers more cautious.
The timing is uncomfortable because iron ore was already under pressure from weak steel fundamentals. Chinese steel mills, which account for a huge share of global iron ore demand, have seen margins deteriorate again. Pig iron output has now fallen for four consecutive weeks.
China is the world’s largest steel producer and the key buyer of iron ore, so any slowdown there directly affects prices. Construction activity, one of the most important demand channels for steel, has dropped to its lowest level since the start of the pandemic. Industrial activity in July also contracted for the first time in five months.
Two risks cloud the outlook
The market now faces two separate challenges. One is short-term anxiety tied to a single physical trader. The other, more fundamental issue is the weaker outlook for Chinese steel consumption.
For mining companies, the environment is getting tougher. At around $94 a tonne, the biggest producers remain profitable thanks to low extraction costs, but revenue pressure is increasing.
Investors are now watching two things: whether Radiant World’s problems affect liquidity in physical iron ore trade, and whether China’s steel sector can find a floor. For now, the prevailing assumption is cautious – less steel, softer demand and higher market sensitivity to any sign of trouble.
Źródło: WNP.PL, Fot. Kefentse Molotsane / Pexels
