Due to lack of sufficient demand in China, iron ore is trading at less than $90 per tonne

Chronicle of raw materials Due to lack of sufficient demand in China, iron ore is trading at less than $90 per tonne Published on: 10/30/2026 - 00:11

Listen - 02:07 Iron, essential for making steel, has seen its price fall to its lowest level in more than two years. Several times in recent days, prices have fallen below $90 per tonne. This decline is explained by a combination of essentially two factors, supply and demand.

To this global context, we must add a traditionally weak demand for steel in November-December and high Chinese port stocks: they increased by 14% year-on-year according to the Reuters news agency, which does not stimulate purchases, on the contrary.

On the other hand, the global supply is only growing. Deliveries from the four main mining groups – including Rio Ttinto and BHP – are expected to increase in the fourth quarter. An abundance to which the giant Simandou mine, which came into operation less than a year ago in Guinea, contributes in particular.

All these factors could keep prices at the current level, or even push them a little lower in the short term. But in the medium term, “everyone is swimming in uncertainty” confides Jean-Paul Mermet, director of AC3A, a firm specializing in steel and aluminum trading, who evokes a “steel and aluminum market of incredible volatility” in which buyers commit to increasingly short periods, due to lack of being able to make projections. “What is true one day is no longer true the next,” summarizes the expert.

The current drop in prices has multiple consequences, particularly in Brazil, the world's second largest supplier. Several small independent Brazilian producers have decided to limit their production and sometimes even to make part of their employees unemployed: their margins have become too low with the increase in maritime transport costs. On the Brazil-China route, the cost of a ship loaded with iron ore was twice as high in September as a year ago.

Indirectly, prices also had an impact on the sale of one of Brazil's main mineral ports. The low prices weighed on the purchase offers deemed insufficient for the sellers, who expected 30% more, according to the sellers. The sale has been suspended until the economic outlook for the sector improves.

Follow all the international news by downloading the RFI application

Machine-translated from French