IO Weekly Technicals Review [2025/11]: Bullish Momentum Builds
SGX TSI Iron Ore CFR China (62% Fe Fines) Index Futures (“SGX IO Futures”) rose last week, closing USD 3.35/ton higher by 14/March (Fri).
SGX IO Futures opened at USD 100.05/ton on 10/March (Mon) and closed at USD 103.40/ton on 14/March (Fri).
Prices briefly touched a weekly high of USD 104.15/ton on 14/March (Fri) and a low of USD 98.85/ton on 11/March (Tue). It traded in a range of USD 5.30/ton during the week, which was wider than the prior week.
Prices crossed the pivot point of USD 100.75/ton and R1 point of USD 102.55/ton during the week, closing between the R1 point and the R2 point at USD 104.65/ton.
Volume peaked on 14/March (Fri) owing to a surge in investor sentiment as steelmakers ramped up production during peak construction season in March.
IO Fundamentals in Summary
Steel consumption recovery fuelled optimism, pushing prices to a two-week peak, while stimulus hopes to reignite following the conclusion of China’s Two Sessions.
The average daily hot metal output climbed for the third consecutive week to 2.31 million tons. Additionally, with pig iron production on the rise & downstream demand strengthening, the industry’s overall consumption is gaining momentum, offering solid support for IO prices.
Moreover, China’s central bank announced on Thursday last week, its plan to lower interest rates & the reserve requirement ratio when appropriate while ensuring ample liquidity, boosting market confidence.
China's port IO stockpiles dropped by 1.80 million tons (-1.26%) WoW to 141.17 million tons for the week ending 14/March as per MMI data.
Based on seasonality, SGX IO Futures April contract trades 18.32% below its last 5-year average (USD 125.43/ton).
Short-Term MA Signal Imminent Uptrend Following Demand Recovery
The 9-day and 21-day DMAs are starting to reverse its divergence following a sharp rally in IO prices, suggesting potential further gains in the short-term strengthened by robust steel demand and rising mill profitability.
IO Prices Rallied Past its 100-day & 200-day DMA
IO prices rallied past its 100-day & 200-day DMAs last week and closed marginally above the 200-day DMA and below its 100-day DMA. Buoyancy in IO prices driven by stimulus hopes & seasonality augurs for strengthening bullishness in the near term.
MACD Signals Weakening Bearish Momentum, RSI Points Towards Neutrality
The MACD suggests bullish momentum is heating up, with the 12-day & 26-day moving averages converging, hinting at further upside potential. Meanwhile, the RSI at 46.96 paints a neutral market sentiment, leaving room for the next big move.
Volatility Falls Sharply & IO Prices Closed Below 50% Fibonacci Level Amid Uptrend
Volatility declined sharply this week. Prices traded between the 78.6% Fibonacci level (USD 98.95/ton) and the 38.2% level (USD 104.45/ton), closing below the 50% Fibonacci level. Going forward, 38.2% Fibonacci level (USD 104.45/ton) may act as resistance, with 61.8% Fibonacci level (USD 101.20/ton) as support.
Buying Pressure Strengthened & IO Prices Trade Below Basis Bollinger Band Levels
Buying pressure strengthened during second half of last week based on A/D indicator. IO prices have been well supported at the lower band of the Bollinger. IO prices have steadily climbed from the lower to the basis band during the week and closed marginally below at USD 102.25/ton.
China’s Two Sessions: A Key Catalyst for Iron Ore Market Swings?
China's Two Sessions (Lianghui) is an annual political gathering in China where key economic and industrial policies are set. This can significantly impact China linked assets including IO. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to limited policy interventions or cautious economic targets. While 2021 and 2022 saw initial optimism fueling price spikes before corrections, 2023 and 2024 featured steady declines amid weak demand and rising inventories. This trend underscores China's policy direction as a key driver of iron ore market fluctuations.
Source: TradingView Data and Mint Finance Analysis
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 91.6k lots and 38.9k across all futures expiries. Physicals participants and Others are net short with 90.5k and 39.9k lots respectively across all futures expires. Managed Money decreased net long positions. Physicals decreased net short positions while FIs increased net long positions last week. Overall futures open interest was 1,141,304 lots as of 7/March (-8.6%) while it was 1,249,118 lots as of 28/Feb.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 90.6k lots and 37.2k across all futures and options expiries. Physicals participants and Others are net short with 80.1k and 47.7k lots respectively across all futures and options expires. Managed Money decreased net long positions. Physicals decreased net short positions while FIs increased net long positions last week. Overall futures and options open interest was 1,399,761 lots as of 7/March (-6.71%) while it was 1,500,490 lots as of 28/Feb.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants continued to maintain a net short position. Managed Money participants have switched from net short to being net long over the last five weeks but have been sharply reducing their long positions. Financial Institutions continue to hold net long positions since the second quarter of last year.
Hypothetical Trade Setup
IO prices surged to a two-week high, driven by brighter China steel demand outlook and hopes of stimulus to drive domestic Chinese consumption. China’s Two Sessions unveiled a fresh stimulus plan, while the central bank reaffirmed its commitment to lower interest rates and reserve requirement ratio, igniting market optimism. This mirrors past trends where economic support hopes drove pre-session gains in 2021 & 2022.
Prices climbed 3%, fuelled by bullish momentum. The MACD hints at fading bearish pressure as short- and medium-term moving averages converge. Prices bounced off the 78.6% Fibonacci level, closing marginally below the 50% mark, indicating bullishness.
Against this backdrop, this paper posits a long position in SGX Iron Ore Futures expiring on 30th April 2025 with an entry at USD 102.20/ton combined with a take profit level at USD 105.70/ton and a stop-loss at USD 98.70/ton resulting in a reward-to-risk ratio of 1x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
SGX IO Futures opened at USD 100.05/ton on 10/March (Mon) and closed at USD 103.40/ton on 14/March (Fri).
Prices briefly touched a weekly high of USD 104.15/ton on 14/March (Fri) and a low of USD 98.85/ton on 11/March (Tue). It traded in a range of USD 5.30/ton during the week, which was wider than the prior week.
Prices crossed the pivot point of USD 100.75/ton and R1 point of USD 102.55/ton during the week, closing between the R1 point and the R2 point at USD 104.65/ton.
Volume peaked on 14/March (Fri) owing to a surge in investor sentiment as steelmakers ramped up production during peak construction season in March.
IO Fundamentals in Summary
Steel consumption recovery fuelled optimism, pushing prices to a two-week peak, while stimulus hopes to reignite following the conclusion of China’s Two Sessions.
The average daily hot metal output climbed for the third consecutive week to 2.31 million tons. Additionally, with pig iron production on the rise & downstream demand strengthening, the industry’s overall consumption is gaining momentum, offering solid support for IO prices.
Moreover, China’s central bank announced on Thursday last week, its plan to lower interest rates & the reserve requirement ratio when appropriate while ensuring ample liquidity, boosting market confidence.
China's port IO stockpiles dropped by 1.80 million tons (-1.26%) WoW to 141.17 million tons for the week ending 14/March as per MMI data.
Based on seasonality, SGX IO Futures April contract trades 18.32% below its last 5-year average (USD 125.43/ton).
Short-Term MA Signal Imminent Uptrend Following Demand Recovery
The 9-day and 21-day DMAs are starting to reverse its divergence following a sharp rally in IO prices, suggesting potential further gains in the short-term strengthened by robust steel demand and rising mill profitability.
IO Prices Rallied Past its 100-day & 200-day DMA
IO prices rallied past its 100-day & 200-day DMAs last week and closed marginally above the 200-day DMA and below its 100-day DMA. Buoyancy in IO prices driven by stimulus hopes & seasonality augurs for strengthening bullishness in the near term.
MACD Signals Weakening Bearish Momentum, RSI Points Towards Neutrality
The MACD suggests bullish momentum is heating up, with the 12-day & 26-day moving averages converging, hinting at further upside potential. Meanwhile, the RSI at 46.96 paints a neutral market sentiment, leaving room for the next big move.
Volatility Falls Sharply & IO Prices Closed Below 50% Fibonacci Level Amid Uptrend
Volatility declined sharply this week. Prices traded between the 78.6% Fibonacci level (USD 98.95/ton) and the 38.2% level (USD 104.45/ton), closing below the 50% Fibonacci level. Going forward, 38.2% Fibonacci level (USD 104.45/ton) may act as resistance, with 61.8% Fibonacci level (USD 101.20/ton) as support.
Buying Pressure Strengthened & IO Prices Trade Below Basis Bollinger Band Levels
Buying pressure strengthened during second half of last week based on A/D indicator. IO prices have been well supported at the lower band of the Bollinger. IO prices have steadily climbed from the lower to the basis band during the week and closed marginally below at USD 102.25/ton.
China’s Two Sessions: A Key Catalyst for Iron Ore Market Swings?
China's Two Sessions (Lianghui) is an annual political gathering in China where key economic and industrial policies are set. This can significantly impact China linked assets including IO. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to limited policy interventions or cautious economic targets. While 2021 and 2022 saw initial optimism fueling price spikes before corrections, 2023 and 2024 featured steady declines amid weak demand and rising inventories. This trend underscores China's policy direction as a key driver of iron ore market fluctuations.
Source: TradingView Data and Mint Finance Analysis
IO Futures Only Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 91.6k lots and 38.9k across all futures expiries. Physicals participants and Others are net short with 90.5k and 39.9k lots respectively across all futures expires. Managed Money decreased net long positions. Physicals decreased net short positions while FIs increased net long positions last week. Overall futures open interest was 1,141,304 lots as of 7/March (-8.6%) while it was 1,249,118 lots as of 28/Feb.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 90.6k lots and 37.2k across all futures and options expiries. Physicals participants and Others are net short with 80.1k and 47.7k lots respectively across all futures and options expires. Managed Money decreased net long positions. Physicals decreased net short positions while FIs increased net long positions last week. Overall futures and options open interest was 1,399,761 lots as of 7/March (-6.71%) while it was 1,500,490 lots as of 28/Feb.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants continued to maintain a net short position. Managed Money participants have switched from net short to being net long over the last five weeks but have been sharply reducing their long positions. Financial Institutions continue to hold net long positions since the second quarter of last year.
Hypothetical Trade Setup
IO prices surged to a two-week high, driven by brighter China steel demand outlook and hopes of stimulus to drive domestic Chinese consumption. China’s Two Sessions unveiled a fresh stimulus plan, while the central bank reaffirmed its commitment to lower interest rates and reserve requirement ratio, igniting market optimism. This mirrors past trends where economic support hopes drove pre-session gains in 2021 & 2022.
Prices climbed 3%, fuelled by bullish momentum. The MACD hints at fading bearish pressure as short- and medium-term moving averages converge. Prices bounced off the 78.6% Fibonacci level, closing marginally below the 50% mark, indicating bullishness.
Against this backdrop, this paper posits a long position in SGX Iron Ore Futures expiring on 30th April 2025 with an entry at USD 102.20/ton combined with a take profit level at USD 105.70/ton and a stop-loss at USD 98.70/ton resulting in a reward-to-risk ratio of 1x.
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.