Iron ore reverses the pressure of the off-season to achieve the best single-week performance in two months. BHP Group Ltd's Sponsored American Depositary Receipt Repr 2 Shs (BHP.US) port strikes and FMG disputes are the twin engines.

Despite the pressure on fundamentals, concerns over supply were raised as the upcoming strike at the Hedland terminal under BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs (BHP.US) sparked worries in the market. As a result, iron ore prices are expected to achieve the largest weekly gain since early May. As of Friday, the price of this steelmaking raw material has increased by 1.6%, breaking the $99 per ton mark in futures contracts on the Singapore Exchange. This trend contrasts sharply with June when iron ore saw three weeks of declines out of four due to seasonal weak demand and narrowing steel mill profits. Prices of the commodity have been under pressure during the traditional off-season for steel consumption, mainly due to increased maritime supply and persistently high inventory levels at Chinese ports. The catalyst for the price increase came from the union representing workers at the Western Australia Hedland port terminal for BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs announcing an eight-hour strike on July 16. This move signifies a further escalation in labor relations and could potentially threaten some supply. Meanwhile, the dispute between China and Australian mining company Fortescue Ltd. (FMG) remains unresolved, with restrictions on the company's "super fines" product still in place. State-owned purchase enterprises have informed several steel mills and traders to suspend the purchase of this ore in dollar-priced cargoes. On the fundamental side, profits of domestic steel mills continue to deteriorate. According to Mysteel survey data, only about 40% of steel mills are currently profitable, a decrease of nearly 3 percentage points from last week and a significant drop of over 19 percentage points from the same period last year. Meanwhile, blast furnace operating rates remain strong. As of the time of writing, iron ore futures in Singapore rose slightly by 0.5%, to $99.20 per ton; while iron ore contracts on the Dalian Commodity Exchange strengthened, Shanghai rebar futures saw a decline.