IO Weekly TA [2025/12]:Bears Growl Amid Falling Prop InvestmentsSGX TSI Iron Ore CFR China (62% Fe) Index Futures (“IO Futures”) dropped last week, closing USD 3.60/ton lower by end of week.
Friday’s T+1 session is depicted as the following Monday’s trading session on TradingView.
IO Futures opened at USD 103.60/ton on 17/March (Mon) and closed at USD 100/ton on 21/Mar (Fri).
Prices briefly touched a weekly high of USD 103.75/ton on 17/Mar (Mon) and a low of USD 99.05/ton on 21/Mar (Fri). It traded in a range of USD 4.70/ton during the week, which was narrower than the prior week.
Prices crossed the S1 point of USD 100.10/ton and pivot point of USD 102.15/ton during the week, closing below the S1 (USD 100/ton).
Volume peaked on 17/March (Mon) as previously idled mines and beneficiation plants resumed operations post-major meetings.
Iron Ore Fundamentals in Summary
Prices hovered near their 3-month low as China’s steel industry’s recovery remains sluggish despite Beijing’s policy support.
China’s property sector continues to struggle , with January–February data showing a steep 9.8% drop in investment and a 5.1% decline in sales YoY. New construction starts plummeted 29.6%, extending 2024’s 23% slump.
Citi expects iron ore prices to remain capped unless China's steel demand sees a significant rebound. The bank projects for IO to trade around USD 100/ton, citing minimal supply disruptions in Australia and Brazil and anticipating faster supply growth. UBS forecasts prices averaging USD 100 in 2025, dipping to USD 95 in 2026 and USD 90 in 2027.
China's port IO stockpiles increased by 0.27 million tons (+0.2%) WoW to 141.44 million tons for the week ending 21/Mar as per MMI data .
Based on seasonality, IO Futures April contract trades 20.3% below its last 5-year average (USD 124.35/ton).
Short-Term MA Signals Imminent Downtrend amid Demand Woes
The 9-day and 21-day moving averages suggest that bearish momentum remains intact. With the gap between them widening, the odds of a bullish crossover in the near term appear slim—unless prices mount a decisive comeback.
Prices Trend Down Amid Potential Long-term Moving Average Convergence
IO prices are trading well below 100-day & 200-day DMAs, which now act as support levels. Will prices revert towards longer-term averages or sustain their downward trajectory?
MACD Signals Weakening Bearish Momentum, RSI Stalls in Neutral Zone
The MACD line is near the signal line suggesting weakening momentum of the bearish trend. Meanwhile, the RSI is at 40.39, suggesting a weak momentum phase, leaning toward bearish territory but not yet oversold.
Volatility Steady & IO Prices Close Below 61.8% Fibonacci Levels
Volatility remained steady this week. Prices traded between the 78.6% Fibonacci level (USD 98.85/ton) and the 38.2% level (USD 104.20/ton), closing below the 61.8% Fibonacci level. Going forward, 61.8% Fibonacci level (USD 101.05/ton) may act as resistance, with 78.6% Fibonacci level (USD 98.85/ton) as support.
Buying Pressure Softened & IO Prices Trade Below Below Basis Bollinger Band Levels
Buying pressure softened during second half of last week based on A/D indicator. IO prices gradually fell from the basis band towards the lower band closing at USD 100.25/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 iron ore. Over the past four years (2021-2024), prices have shown a pattern of pre-meeting speculation-driven gains, followed by declines due to 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 103k lots and 33.3k across all futures expiries. Physicals participants and Others are net short with 105.6k and 30.8k lots respectively across all futures expires. Managed Money decreased net long positions. Physicals increased net short positions while FIs increased net long positions last week. Overall futures open interest was 1,262,337 lots as of 14/March (+10.6%) while it was 1,141,304 lots as of 07/March.
Source: SGX
IO Futures & Options Aggregate Exposure
Financial Institutions (FIs) and Managed Money participants are net long with 96.6k lots and 40.4k across all futures and options expiries. Physicals participants and Others are net short with 98.8k and 38.2k lots respectively across all futures and options expires. Managed Money increased net long positions, Physicals increased net short positions while FIs increased net long positions last week. Overall futures and options open interest was 1,528,361 lots as of 14/March (+9.2%) while it was 1,399,761 lots as of 07/March.
Source: SGX
Historical Futures Aggregate Exposure by Market Participants
Physical participants continue to maintain their short position. Managed Money participants have switched from net short to being net long in the last six weeks. Financial Institutions continue to hold net long positions since the second quarter of last year.
Source: SGX and Mint Finance Analysis
Hypothetical Trade Setup
IO prices linger near a three-month low as China’s steel sector struggles to gain momentum, despite policy boosts from Beijing. The ongoing downturn in the property market, marked by plunging investment and sales, further weighs on sentiment. This contrasts with past years when hopes of economic stimulus fuelled early-session rallies in 2021 and 2022.
MACD hints at fading bearish momentum, while RSI stalls near neutral zone. Iron ore prices slipped from above the 50% Fibonacci level, closing just below the 61.8% mark—suggesting a strengthening bearish grip.
Against this backdrop, this paper posits a short position in SGX Iron Ore Futures expiring on 30th April 2025 (FEFJ2025) with an entry at USD 100.80/ton combined with a take profit level at USD 96.30/ton and a stop-loss at USD 104.40/ton resulting in a reward-to-risk ratio of 1.25x.
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