Iron Ore Price Hovers Around $100 Per Ton, With Mixed Forecasts for 2025

Futures on China’s Dalian Commodity Exchange (DCE) recently began to climb, raising hopes for higher iron ore prices in early 2025. The DCE’s most-traded May contract closed 1.06% higher at approximately $111.54 (810.5 yuan) metric ton last Monday, up over 4% on the month. The continuing price surge on both DCE and the Singapore Exchange has led most traders to become optimistic about prices and optimistic about upcoming months.

For China, the primary growth driver for global iron ore demand, opportunities and challenges lie ahead in the new year. While worries remain about the nation’s manufacturing sector, which posted its worst performance since August, optimism is rising as construction of new infrastructure and steel plants proceeds apace. In January, daily production of crude steel at major companies rose by 0.3%, according to the China Iron and Steel Association. The easing of trade tensions between the United States and China has led to cautious hope the Chinese economy will recover, boosting its demand for iron ore.

However, there are risks. The international iron ore price is still low, at about US$100 a tonne, with some market experts predicting more falls in the months ahead. The sector’s fate is closely tied to the Chinese economy, which has been weakening due to a cutback in infrastructure projects and a lack of demand for real estate. In addition, speculation in the iron ore futures market still drives volatility. Some analysts expect Beijing to make the moves necessary to stimulate the economy in 2025, but it remains to be seen what will happen to iron ore prices as a result. The speculative frenzy in trading, fueled by hedge funds and investor attempts to profit from price swings, has forced markets to become wildly volatile. This leaves the outlook for iron ore prices mixed, with a touch of bullishness and a dash of bearishness for the coming year.