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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

Amid additional US tariff relief, iron ore futures tested the eight-month lows at CNY 698 on May 27 and then edged higher to CNY 710 per tonne. Manufacturing in major economies was maintained when a federal US court banned retaliatory tariffs that President Trump had imposed because of the erroneous declaration of economic emergency. Nevertheless, due to China's weak demand for ferrous metals, futures have down 10% so far this year. China hinted that it would forbid real estate developers from selling houses before they are finished, cutting off a vital source of funding for businesses. This would put additional financial strain on the indebted industry, increasing the likelihood of massive liquidations and eliminating a significant bidding source for international steel markets. Also, speculation of incoming capacity limits were backed by Baosteel stating that total mainland production could fall by 50 million tons this year. The decline in prices prevailed despite measures to stimulate consumption, including slashes in rates by the PBoC and higher bond sales.

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.