China says Nvidia broke competition rules, extends probe; stock off lows
Investing.com -- Iron ore price volatility has fallen to its lowest level since the industry adopted spot pricing in 2008 and 2009, with prices trading in a narrow range since mid-2024.
The metal has averaged around $100 a ton, with a low of $90 and a high of $110. Analysts at UBS Global Research attribute the unusually stable pricing to changes in Chinese buying behavior combined with balanced market fundamentals.
The creation of China Minerals Resources Group (CMRG) in July 2022 has reshaped market dynamics. CMRG now represents more than half of China’s steelmakers in negotiations with global suppliers and manages demand, pricing, and strategic inventory holdings.
UBS analysts note that the consolidation of buying power has shifted leverage from miners to steelmakers and reduced speculative activity, contributing to smoother price movements.
Iron ore prices were around $105 a ton last week, supported by a rebound in activity following a military parade and optimism linked to China’s work plan and expectations of a U.S. Federal Reserve rate cut.
Market indicators point to a broadly balanced situation: inventories at Chinese ports and mills remain stable week on week, shipments from traditional markets are recovering with Brazil reporting a 3% year-to-date increase, and steel production in China accelerated in early August.
MySteel utilization rates are broadly flat, while steel exports from China held at roughly 106 million tons annually in August despite rising trade restrictions.
Baosteel expects exports to remain above 100 million tons in 2025, although volumes are projected to soften in the fourth quarter.
On the financial side, positioning on the Dalian exchange has turned slightly more negative, with net contracts at minus 2 million tons.
UBS analysts maintain “neutral” ratings on Vale, Rio Tinto, and BHP, while recommending a sell on Fortescue Metals Group and KIO.
Spot free cash flow yields for 2026 are estimated at 4% for BHP, 8% for Rio Tinto, and 15% for Vale.
UBS analysts suggest that the current low volatility may become the new normal, allowing steelmakers to better forecast costs but offering fewer trading opportunities for financial participants.
Broader price trends are still expected to reflect supply-demand fundamentals, though CMRG’s concentrated buying power is likely to compress margins for miners.
The stability in iron ore prices reflects a market increasingly influenced by strategic coordination rather than short-term speculation.
According to UBS analysis, the combination of steady inventories, balanced production, and centralized demand management has created conditions rarely observed in the past 15 years.