Iron Ore, Coal and Steel: SGX, Dalian, Newcastle — 2026-09-04
Iron ore prices hovered near US$95–US$98/tonne this week as strong Chinese import volumes clashed with a 9% year-on-year drop in July steel output. Meanwhile, Chinese coking coal prices are poised for a record monthly gain due to supply disruptions and stricter safety inspections, squeezing steel mill margins.
Iron Ore, Coal and Steel: SGX, Dalian, Newcastle — 2026-09-04
Top developments
Coking Coal Heads for Record Monthly Gain
Chinese coking coal prices are on track for their biggest monthly increase on record, driven by supply crunches from output disruptions and intensified safety checks in domestic mines. This surge significantly raises input costs for steelmakers, creating a cost-push environment that contrasts with weak end-user demand. The divergence between rising raw material costs and soft steel consumption is compressing mill margins, which may lead to reduced iron ore procurement in the short term.
Iron Ore Volatility Amidst Weak Steel Output
Benchmark iron ore prices fluctuated between US$95.84 and US$97.72 per tonne over the past week, reflecting a tug-of-war between restocking activity and poor industrial data. On September 3, iron ore slipped 1.62% to US$97.72/tonne as traders reacted to a 3.1% drop in Chinese steel output, despite firm imports of 736.84 million tonnes in the first seven months. Earlier in the week, Vale shares fell 1.83% as the market digested the 9% year-on-year decline in July steel production, highlighting the disconnect between inventory levels and actual consumption.
Brazilian Exports Set for Record Year
Brazilian iron ore exporters are preparing for a new record in export volumes for 2026, following a 2.4% growth in shipped volumes during the first half of the year. This momentum suggests sustained supply availability from Brazil, which helps cap price rallies by ensuring adequate seaborne supply to meet Chinese demand. The robust export performance from Brazil provides a counterweight to potential supply constraints from other regions, keeping the global market well-supplied.
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Local view
In China, market sentiment remains cautious but supported by restocking activities. SteelRadar noted that while physical market activity was subdued, futures prices strengthened on August 28, with the most-traded DCE iron ore contract I2701 settling higher despite weak spot trading. Sina Finance highlighted that Guotai Junan reduced long positions in black commodities on August 25, signaling institutional caution regarding the sustainability of the rally given the fundamental weakness in steel demand.
Context & numbers
- Iron Ore Price Range: SGX benchmark iron ore traded between US$95.84 (Aug 29) and US$97.72 (Sep 3) per tonne.
- Chinese Steel Output: July steel output dropped 9% year-on-year; first-seven-month cumulative imports of iron ore stood at 736.84 million tonnes.
- Australian Exports: Australia's iron ore exports fell 11.8% month-on-month in July, with China remaining the largest importer.
- Pilbara Throughput: Pilbara Ports recorded 63.8 million tonnes in July, a 1% decrease compared to the previous month.
On the radar
- Indian Coal Stocks: As many as 45 coal-fired power plants in India are operating with critically low coal stocks amid rising electricity demand and El Niño conditions, potentially boosting Newcastle thermal coal demand.
- Fortescue Diversification: Fortescue has begun shipping iron ore cargoes to India and Vietnam after a hiatus, diversifying away from reliance on Chinese buyers amidst ongoing negotiations with state-backed entities.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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