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The Iran conflict is driving up freight rates, while declining shipment volumes are supporting higher iron ore prices.

Category: Blog

Time:2026-03-04

On Monday, March 2, iron ore prices reversed their early-session decline and closed higher amid volatile trading. Market attention has shifted to the potential rise in shipping costs due to the Iran conflict, as well as the expected decline in shipments from major supplying countries.

On Monday, March 2, iron ore prices reversed their early-session decline and closed higher amid volatile trading. Market attention has shifted to the potential rise in freight rates due to the Iran conflict, as well as the expected drop in shipments from major supplying countries.
The most active May iron ore contract on the Dalian Commodity Exchange closed up 0.87% during daytime trading, at 754.5 yuan per ton (approximately US$109.64). As of 3:31 p.m. Beijing time, the April iron ore benchmark contract on the Singapore Exchange rose 0.85% to US$99.20 per ton.
A futures analyst at Zhengxin Futures pointed out that the U.S.-Iran conflict has driven oil prices to surge, thereby pushing up freight costs and providing support for iron ore prices. Weekly shipments from key supplier countries Australia and Brazil declined by 0.8% compared to the previous week, which also contributed to the upward pressure on prices.
During the early trading session, iron ore prices briefly declined as Tangshan, China’s major steel-producing region, imposed production restrictions. Due to a worsening air quality forecast, Tangshan activated a Level II emergency response for severe pollution starting March 1, requiring local steel mills to cut production and thereby curbing demand for raw materials. Previously, to ensure good air quality during the National People's Congress meeting scheduled to open on March 5, steel mills in many northern regions had already received orders to reduce output.
Analysts pointed out that the slow recovery in steel demand, the continued buildup of finished-product inventories, and persistently high port stocks are collectively putting downward pressure on iron ore prices. According to data from the consulting firm Steel Home, as of February 27, iron ore inventories at China’s major ports surged to a record high of 162 million tons. Other steelmaking raw materials also rebounded from earlier losses, with coking coal and coke closing the day’s trading up by 1.06% and 1.38%, respectively.
Steel products on the Shanghai Futures Exchange in China generally closed higher. Rebar rose by 0.26%, hot-rolled coil increased by 0.34%, wire rod climbed by 0.24%, and stainless steel surged by 1.91%.

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The Iran conflict is driving up freight rates, while declining shipment volumes are supporting higher iron ore prices.

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