CMRG Warns Speculation Inflates Iron Ore Prices Unfairly
China's CMRG warns iron ore prices are inflated by speculation, diverging from market reality, affecting steel mills' costs.
A state-backed iron ore trader in China, China Mineral Resources Group (CMRG), has warned that iron ore prices are being pushed towards 'false heat' due to speculative trading, distancing them from the physical market reality, according to comments reported by Bloomberg from the company's research unit on the WeChat account of the China Iron and Steel Association.The company noted in its comment published on Tuesday evening that the current rebound in iron ore prices is a result of speculative trading activity, indicating that some traders are operating in both the futures and physical markets in ways that create 'local tension' and affect market sentiment, thereby inflating costs for Chinese steel mills.The spot price of iron ore rose by over 5% between November 7 and December 2, reaching approximately $107.80 per ton, despite rising port inventories, declining steel demand, and reduced medium hot metal production. Since then, prices have slightly retreated, with futures contracts trading in a narrow range above $100 per ton over the past four months.CMRG, considered a key player in the global iron ore market, pointed to 'unfair' pricing practices that burden Chinese steel mills, having previously resorted to banning some iron ore shipments from BHP Group to negotiate better terms. In a recent development, the most actively traded iron ore contract on the Singapore Exchange rose by 1.1% to $102.95 per ton, while contracts priced in yuan on the Dalian Exchange increased by 1.5%, alongside gains in Shanghai steel contracts.This warning signals ongoing concerns about market volatility, with speculation expected to continue influencing prices despite underlying pressures such as weak demand, which could impact production costs in the world's largest iron ore consumer.
Sources & References
Bloomberg
Editorial Note
Edited & Reviewed by the Ecopulse Editorial Board 12/12/2025, 12:03:05 UTC
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