Iron Ore Prices Hold Steady, but China's May Import Data Reveals 8 Million Ton Shortfall
0xBroomberg
Iron ore has been the calmest major commodity since the Hormuz Strait crisis, trading in a $14 range all year; yet China's May customs figures fell roughly 8 million tonnes short of vessel-tracking data — a gap that sits atop record port inventories and declining steel output.
The Strait of Hormuz shut — why didn't iron ore flinch?
After the U.S.–Israeli strikes on Iran on Feb 28 effectively closed the strait, oil and gas swung hard — but iron ore barely moved, hovering near $105/tonne within a $14 band and settling at $101.65 on June 10.
This means → China sources almost all its iron ore from Australia and Brazil; shipping lanes bypass Hormuz entirely, making the supply chain naturally immune to Middle East risk.
In plain terms = the ships carrying iron ore simply don't use that route.
Where did the 8-million-tonne gap come from?
China's customs bureau reported May iron ore imports of 97.71 million tonnes, down 6% month-on-month — a three-month low.
Vessel-tracking firm DBX Commodities recorded arrivals of 105.56 Mt; Kpler estimated 106.4 Mt. Both exceed the official figure by roughly 8 million tonnes.
Reuters columnist Clyde Russell argues the gap likely reflects late-May arrivals booked into June, and expects official June data to rebound.
In plain terms = the ships docked, but customs hadn't stamped the paperwork — the tonnage rolls into next month's count.
Imports rising while steel output falls — how does that add up?
In the first five months, China imported a total of 516.26 Mt of iron ore, up 6.3% year-on-year; crude steel output over the first four months fell 4.1% to 331.12 Mt.
This means → more ore came in than was consumed, and the surplus piled up at ports.
SteelHome data shows port inventories hit a record 166.91 Mt the week of March 13, easing to 159.09 Mt by June 5 — still roughly 21% above the same week in 2025.
Why is domestic ore increasingly uneconomical?
Domestic iron ore output in the first four months totalled 326.8 Mt, down 1% year-on-year; full-year 2025 output already fell 2.8% from 2024.
Chinese domestic ore grades — the iron content in raw rock — run just 20–30%, versus 60–65% for imports. Low grade means extra cost and energy for beneficiation (the process of upgrading low-grade ore to usable purity).
This reflects a long-term structural shift: imports steadily replacing domestic ore, not a short-term blip.
What's the key question for the second half?
The core unknown: once June official imports rebound as expected, will port inventories actually draw down, or will the stockpile keep capping upside in prices?
This means → the answer hinges on one variable — whether Chinese steel demand stages a meaningful recovery in H2.
In plain terms = ore sitting at ports isn't the problem; idle steel mills are. If demand doesn't show up, inventory becomes the ceiling on price.
Content is for reference only, not financial advice.