Steel and iron ore futures prices hit a one-month low as ample supply and weak demand continued to weigh on the market, according to Reuters.

Iron ore inventories in China remain high, while exports from major producers such as Australia and Brazil continue to increase, further exacerbating supply pressure. Simultaneously, China's iron ore imports in the first four months of the year rose 8% year-on-year to 418.6 million tonnes, according to official data.

Conversely, weakening steel demand has limited raw material purchases by steel mills. China's steel production in April reached 86.63 million tons, down 2.8% year-on-year and the lowest April production figure since 2018.

For the first four months of the year, China's steel production totaled 331.12 million tons, down 4.1% year-on-year. However, iron ore imports remained high, indicating an increasingly clear mismatch between steel production demand and raw material purchases.

In April alone, China imported 103.9 million tons of iron ore, a slight decrease of 0.8% from the 104.74 million tons imported in March. Nevertheless, on a daily basis, April's imports were still slightly higher due to the fact that April had one fewer day than March.

Analysts at DBX Commodities forecast that iron ore shipments to Chinese ports in May will remain high, at around 104.67 million tons.

The contrasting trends between weakening steel production and a sharp increase in iron ore imports are leading the market to believe that this is no longer a temporary phenomenon but may reflect a structural shift in the Chinese economy.

According to analysts, the prolonged stagnation in the real estate sector, insufficient infrastructure investment, and uneven recovery in steel demand from the manufacturing sector are reducing domestic steel consumption. In this context, steel mills are still increasing iron ore imports due to lower raw material prices, stable supply, and a preference for high-quality imported ore over lower-grade domestic ore.

This suggests that China's iron ore imports may no longer be entirely in sync with steel production as they once were.

However, despite high import volumes, iron ore prices remain under downward pressure as the market focuses more on the outlook for final steel demand, weakening profit margins for steel mills, and oversupply in the international market.

Increased supply from Australia and Brazil, along with large inventories at Chinese ports, is causing market concerns that downward price pressure may continue for some time.

Domestic Steel Price Update
Construction steel prices at various companies remain stable. Specifically, at Hoa Phat, CB240 and D10 CB300 steel are both priced at 15,430 VND/kg.

Similarly, Viet Y Steel Northern recorded CB240 and D10 CB300 steel prices at 15,150 and 14,700 VND/kg respectively. Viet Duc Steel Northern recorded CB240 and CB300 prices at 15,250 and 15,050 VND/kg respectively. Other businesses such as VJS Northern Steel, Pomina, and Southern Steel are maintaining stable prices.