CRU: Iron ore down due to falling hot metal production in China

Iron ore prices declined in the first week of 2025, driven by reduced hot metal production in China. A bleak outlook for steel demand has undermined market confidence, contributing to the drop in prices.

Seasonal demand weakness has become increasingly evident. China’s steel market opened 2025 on a downward trajectory. Demand for HRC has dropped from previous levels and continues to decline while we see a clear downtrend in rebar demand. Falling steel prices have been exacerbated by weak consumption and limited pre-holiday restocking. As a result, hot metal production has declined sharply. The surveyed BF capacity utilisation rates has now fallen below 85%, leading to reduced iron ore consumption. Steel mills continue to restock and onsite inventories at mills are now exceeding levels recorded at the same time last year (according to China’s lunar calendar).