Iron Ore Prices Rise on Restocking Demand and Strong Hot-Metal Output

Iron ore prices advanced on Wednesday, with the Shanghai Futures Exchange's benchmark May contract rising 3.2% to $118.40 per metric ton. The gain followed strong data showing a surge in Chinese hot-metal output, which reached 8.1 million tons in the first 10 days of January—a 12% increase from the same period in 2025. This uptick signals early demand recovery in the steel sector, a key driver of iron ore consumption. Restocking activities across Chinese steel mills have intensified, with inventories dipping to 18-month lows in December. Mills are replenishing supplies amid expectations of higher construction activity during the spring months. According to domestic steel producers, iron ore procurement volumes rose 18% week-over-week in early January, indicating robust near-term demand. The rebound in hot-metal output, a direct proxy for crude steel production, has also lifted sentiment. The Chinese National Bureau of Statistics reported that domestic steel output hit 98.7 million tons in December 2025, the highest monthly total in over two years. This performance, coupled with rising export orders, has prompted traders to reassess supply constraints and shift toward bullish positioning. Global benchmark futures on the Dalian Commodity Exchange also rose, with the May contract gaining 2.9% to $117.85. The broader market remains sensitive to Chinese industrial activity, which accounts for over 70% of global iron ore demand. A sustained recovery in hot-metal output could further support prices in the coming weeks.