Iron ore dips as construction halts weigh down demand

Vale

28/01/2026 03:38

By Ruth Chai

SINGAPORE, Jan 28 (Reuters) - Iron ore futures extended declines on Wednesday, as construction projects gradually halt in the run-up to the Chinese Lunar New Year, weighing down demand for steel and feedstocks.

The most-traded May iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 traded 0.44% lower at 785 yuan ($113.02) a metric ton, as of 0311 GMT.

     The benchmark March iron ore SZZFH6 on the Singapore Exchange was 0.5% lower at $103.3 a ton.

     Downstream steel demand has gradually shrunk along with the cessation of construction projects in the run-up to the Chinese Lunar New Year Holiday, according to Chinese broker Everbright Futures.

     Brazilian miner Vale's VALE3.SA iron ore production rose to 336.1 million tons in 2025, the company said on Tuesday, marking the first time since 2018 that its output surpassed that of rival Rio Tinto's Pilbara operations in Australia.

This comes after the company halted operations at units that analysts say account for about 2% of its iron ore production outlook for this year after water overflowed at the sites, according to a securities filing late Monday.

An increase in iron ore shipments from Brazil will exert downward pressures in Chinese iron ore prices.

Brazilian shipments are expected to experience a seasonal pullback as the country enters its rainy season. However, high port inventories are expected to offset potential upsides from reduced shipments, according to a note from the Shanghai Metals Market (SMM).

Other steelmaking ingredients on the DCE languished, with coking coal DJMcv1 and coke DCJcv1 down 0.8% and 1.04%, respectively.

Steel benchmarks on the Shanghai Futures Exchange lost ground. Rebar SRBcv1 shed 0.41%, hot-rolled coil SHHCcv1 lost 0.39%, wire rod SWRcv1 cooled 0.06% and stainless steel SHSScv1 fell 1.5%.

($1 = 6.9454 yuan)

 (Reporting by Ruth Chai; Editing by Rashmi Aich)

 ((ruth.chai@thomsonreuters.com;))