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Iron is the most commonly used metal worldwide. It is mainly used in the construction, mechanical, automotive and machinery industries, often as the main ingredient in steel. As such, iron ore supply is an important factor for the global economy. In terms of usable iron ore production, Australia and Brazil are the two largest iron producers in the world

As worries about China's steel industry and faltering real estate market weighed on morale, iron ore prices for cargoes with 62% iron content dropped to $102 per ton, a one-week low. Slow demand was reflected in the six-month low for steel rebar futures. In the meantime, China's real estate market continued to be strained, and in February, new home prices dropped more quickly even with government assistance. A specific action plan to increase consumer spending was recently revealed by Beijing, adding to the cautious view, although investors were left wondering about the timing and scope of the initiative. Meanwhile, in an attempt to reduce overcapacity, the Chinese government reiterated its pledge to restrict the production of crude steel. The move is expected to cut annual steel output by 50 million tons, further impacting iron ore demand.

While Australia and Brazil are the largest exporters of iron ore, China is by far the largest importer of iron ore. As with many other commodities, Chinese demand significantly determines the global iron ore market. Nearly two-thirds of global iron ore exports to China are more than a billion tons.