Iron ore futures in Singapore topped $109 a ton, a 15-month high that has left many analysts puzzled. This price surge comes as China’s steel output in 2025 dropped to a seven-year low of approximately 964 million tons, falling below the one-billion-ton mark for the first time since 2018. Despite a cooling property sector and ballooning port stockpiles, which hit a near four-year high of 159.7 million tons by the end of December, investor optimism and seasonal factors continue to push prices upward.
Iron ore’s robust start to the year continues to highlight what many observers deem to be a persistent mismatch between market pricing and conditions on the ground https://t.co/fGADr1AZGy
— Bloomberg (@business) January 15, 2026
Market experts suggest the current rally is driven more by financial sentiment than physical demand. Hedge funds are betting on a front-loaded fiscal stimulus from Beijing to kick off its new five-year plan. Additionally, steel mills are engaging in “pre-holiday restocking” ahead of the Lunar New Year in February, creating a temporary squeeze on high-grade ore. This divergence has made prices vulnerable to a sharp correction if macro sentiment shifts.
You May Like To Read: Elon Musk: Solar Power to Fuel All of Human Civilization
Looking further into 2026, the market faces a looming supply surplus. The Simandou mega-project in Guinea is set to land its first commercial shipment in China this month, eventually contributing 5% of global production. Furthermore, industry giants BHP and Rio Tinto recently announced a landmark joint venture in Western Australia’s Pilbara region to extract an additional 200 million tons of ore. Analysts from HSBC and ING predict that as this new low-cost supply ramps up, spot prices will likely slide toward $90 a ton by 2027.
Check out our latest video:
