Australia's iron ore (62% Fe, CFR China) price on March 5 hiked by US$1.1 to US$103.35, marking a one-month high since February 5. Iron ore prices rose sharply yesterday, bringing the total increase this month to US$1.65, or 1.6%. The rise came as China’s Two Sessions major political meetings began and factory activity in February contracted for the second consecutive month, prompting market expectations for stronger policy stimulus measures.

At the same time, hot metal output rebounded to 2.3328 million tons, providing additional support for the increase in iron ore prices. Despite the gains, iron ore inventories at Chinese ports remain high. Meanwhile, escalating geopolitical tensions in the Middle East and disruptions to shipping through the Strait of Hormuz have created negative factors for China’s steel exports. However, international prices increased during the Lunar New Year holiday, widening the price spread and helping steel mills maintain relatively high order intake levels. In the short term, iron ore prices are expected to show a fluctuating trend.