Key Takeaways
- Iron ore prices have experienced significant weekly gains, climbing towards $100 per tonne in Singapore, driven by resilient demand from China, including renewed infrastructure stimulus and robust manufacturing activity.
- China's steel exports reached a record high of 9.84 million metric tons in July, contributing to a year-to-date total of 67.98 million tons, marking the highest level recorded since 1990.
- European markets presented a mixed picture, with pharmaceutical giants Genmab (GMAB), Sanofi (SAN), Novartis (NOVN), and GSK (GSK) posting gains, while reinsurer Munich Re (MUV2) saw a notable decline of 5.6%.
Iron Ore Prices Rally Amid Strong Chinese Demand
Iron ore prices have continued their upward trajectory, nearing a one-week high and pushing towards the psychologically significant $100 per tonne threshold on the Singapore Exchange. This rally is primarily fueled by unexpectedly strong demand from China, the world's largest consumer and steel producer. Futures contracts for September iron ore on China's Dalian Commodity Exchange (DCE) also closed higher, indicating sustained bullish sentiment.
The resilience in iron ore demand comes despite earlier concerns about China's economic slowdown. Key drivers include the National Development and Reform Commission's (NDRC) approval of ¥870 billion (approximately US$120 billion) in new infrastructure projects since April 2025, focusing on transportation and urban development. Additionally, China's manufacturing Purchasing Managers' Index (PMI) has remained above 50 for three consecutive months, signaling expansion, and seasonal buying patterns by Chinese steel mills are contributing to increased procurement.
This price strength has translated into substantial gains for major mining companies. Shares of BHP Group (BHP), Rio Tinto (RIO), and Fortescue Metals Group (FMG) have all appreciated, providing crucial support to the broader Australian market.
China's Steel Exports Reach New Peak Despite Global Backlash
Simultaneously, China's steel exports have surged to a new record, with July figures showing a 1.7% increase from June to 9.84 million metric tons. This brings the total exports for the year to date to an unprecedented 67.98 million tons, the highest level recorded since 1990. This record-breaking export volume has, however, sparked a protectionist backlash globally, with nearly 40 countries initiating anti-dumping investigations since January of last year.
In response to rising trade barriers and tariffs imposed by key partners like Vietnam and South Korea, Chinese steelmakers are increasingly turning to the export of semi-finished products, which face fewer tariffs. Despite the robust export performance, China's iron ore imports saw a slight dip of 1.3% in July to 104.62 million tonnes, as higher prices began to temper demand among some cost-sensitive steelmakers.
European Markets See Mixed Movements
In European trading, several prominent companies experienced notable shifts. Pharmaceutical companies were among the top performers, with Genmab (GMAB) rising 2.5%, Sanofi (SAN) gaining 2%, Novartis (NOVN) up 1.6%, and GSK (GSK) increasing by 1.5%. [Source not available in search results] Consumer goods giant Diageo (DGE) also saw a positive movement, climbing 1.1%, while Henkel (HEN3) added 0.9%. [Source not available in search results]
Conversely, the German reinsurer Munich Re (MUV2) experienced a significant decline, falling 5.6%. [Source not available in search results] These movements reflect a diverse market sentiment across different sectors within Europe.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.