Barclays Metals & Mining: Mined Matters – Has iron ore seen the highs for the year?

Research evidence excerpt

Barclays Metals & Mining: Mined Matters – Has iron ore seen the highs for the year?

Barclays | Barclays Metals & Mining

Top news flow

China/Global

• China’s residential property market is expected to remain weak in 2026, with Fitch forecasting

new-home sales to fall 11%–13% YoY, compared with an earlier 7%–8% YoY decline estimate.

Sales dropped 14.1% YoY in 5M26, with momentum weakening again in May after a brief

improvement, reflecting fragile demand amid a soft job market and elevated inventory. The

downturn remains uneven, with strength concentrated in higher-tier cities and larger

projects, while lower-tier markets continue to drag overall performance. Secondary housing

accounted for about 69% of transaction value in 5M26, diverting demand from new homes

and highlighting active downtrading. Despite ongoing policy easing, investment fell 15.6%

and housing starts declined 23.4%, with limited signs of a broad-based recovery.

• China’s M1 money supply growth accelerated to a three-month high in May, marking its 17th

consecutive month of YoY expansion, supported by stronger loan issuance and rising “active

money” circulation. The measure, redefined in January 2025 to include cash, corporate and

personal current deposits and non-bank reserve funds, reflects improved liquidity and weak

domestic credit demand conditions. Factors such as a low base effect, fiscal support

including local government debt swaps, and CNY1.1trn in monthly non-bank deposit growth

contributed to the increase. The M2-M1 spread remained at 3.1%, indicating continued

improvement in money circulation.

• China’s central bank will auction 40bn yuan of six-month bills in Hong Kong on June 22,

according to a statement. The yuan-denominated bills will mature on Dec. 23 and will be