Iron ore prices for cargoes with 62% iron content held around $98 in mid-January, hovering near their lowest levels in over three months, as the latest economic data from China, the top consumer, pointed to mounting deflationary pressures. Chinese steel mills have also been cutting production in response to weaker demand and shrinking profit margins, with steel output expected to decline further throughout the year. At the same time, iron ore shipments to China have increased, with port arrivals remaining elevated as overseas miners ramped up deliveries toward the end of the year to meet annual targets. On a more positive note, China has expanded its consumer goods trade-in scheme to stimulate domestic demand, which has raised some optimism about the future demand outlook for iron ore.
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