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Iron ore prices remained largely range-bound throughout May 2025, reflecting limited volatility in the market. As of May 23, Dalian iron ore futures rose 2.2% month-to-date to $99.73 per tonne, though they recorded a 2.3% weekly decline. Similarly, Singapore Exchange prices edged down slightly to $98.25 per tonne, marking a 0.05% monthly loss and a 3.1% decline over the week.
The market has been caught between opposing forces. On one side, demand from Chinese steel producers remained weak due to the underwhelming recovery of the construction sector and soft macroeconomic indicators. Investor sentiment further deteriorated mid-month with the release of disappointing data on industrial output and credit activity.
Conversely, hopes for an improvement in global trade lent some support. Notably, optimism around U.S.-China trade talks held between May 13–15 lifted prices to a five-week high. A weakening U.S. dollar also contributed, enhancing the purchasing power of Asian importers.
Still, the upside was capped. Concerns over ongoing cuts in Chinese steel production since April and rising shipments from major exporters like Australia and Brazil tempered market confidence. Trading volumes also remained subdued as participants weighed steady demand against the threat of oversupply.
In the near term, prices are expected to fluctuate within a $95–105 per tonne range. Market direction will hinge on economic signals from China—particularly from its construction sector—and further developments in U.S.-China trade relations. Additional policy support from Beijing or continued dollar depreciation could offer moderate price upside, though risks remain from soft demand and increasing stockpiles.
Moody’s forecasts iron ore to trade between $80–100 per tonne over the next 12 to 18 months, citing continued weak Chinese demand and ample global supply. Analysts at BMI Country Risk and Industry Research echoed this outlook, maintaining their 2025 average price projection at $100 per tonne while acknowledging persistent downside pressures.
