Australia's iron ore (62% Fe, CFR China) price on January 29 increased significantly by US$1.8 to US$105.7, rebounding above the US$105 mark after just one week, reaching its highest level in two weeks since the 19th of this month.

The U.S. Federal Reserve’s decision to pause interest rate cuts, coupled with internal differences and signals of a continued accommodative stance, lifted market sentiment. Against this backdrop, China’s spot steel prices strengthened, posting mixed movements, while black futures recorded broad-based gains. Coking coal and coke futures both jumped by more than 3%, providing cost support and pushing iron ore prices sharply higher.

The rally was further supported by a strong appreciation of the Chinese Yuan. The central parity rate rebounded to 6.955 per U.S. dollar, marking its highest level since May 2023 and adding momentum to iron ore prices. Market participants noted that China’s port inventories of imported iron ore have risen above 170 million tons, reaching a near five-year high. However, iron ore inventories held by steel mills remain 13.4% lower year on year. With restocking demand offering support, iron ore prices are expected to stay elevated and fluctuate within a high range.