(Oct 27): Iron ore dropped to the lowest level in more than two years on a weaker demand outlook and rising supply through year-end.

Benchmark futures in Singapore fell as much as 1.4% to US$89.25 a tonne, the lowest intraday level since September 2024. Prices on the Dalian Commodity Exchange were also at a two-year low. China is approaching a seasonally weak period for steel consumption while elevated oil prices have raised concerns about the global economic outlook, leaving few catalysts for a potential rebound.

“Iron ore is likely to stay soft through November,” said Mengtian Jiang, chief ferrous analyst at Horizon Insights. Prices could extend declines toward US$86 to US$85 a tonne, with the last two months of the year historically the weakest period for steel consumption, she added.

“Against elevated port stocks, mills are restocking only hand-to-mouth and have grown desensitised to macro stimulus,” Jiang said. Iron ore shipments from the four major miners, including Rio Tinto Group and BHP Group, are expected to rise by as much as 18 million tonnes in the fourth quarter, while Guinea’s Simandou mine continues to ramp up output, she said.

A stand-off between state-backed buyer China Mineral Resources Group and key miners had injected a supply-risk premium into the market, but that has eased following resolutions, including with Rio Tinto. Still, Australia’s Fortescue Ltd remains stuck in talks with CMRG over a potential deal.

Iron ore was 1.2% lower at US$89.40 a tonne as of 10.45am Singapore time (same time as Malaysia). On the London Metal Exchange, copper rose 0.2% to US$14,360 a tonne as risk sentiment got a boost from a fresh rally in artificial intelligence stocks. Aluminium fell, and zinc held near its highest close this month.

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