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Iron Ore Retreats as Coal Costs Squeeze Steel Mill Economics

Iron ore prices are tracking toward monthly losses as a brief rally sparked by a mining accident in China's Shanxi province has fizzled out. Market participants are now zeroing in on steel mill profitability metrics, where rising coking coal expenses are compressing margins significantly. The surge in coal costs has offset any gains from reduced iron ore supply concerns. This leaves producers struggling with unfavorable input-cost dynamics. Simultaneously, growing shipment volumes continue pressuring overall market sentiment. The weakness in mill economics reflects broader challenges in the steelmaking sector as producers face cost-squeeze pressures. Industrial metals have staged their strongest monthly performance since January, though iron ore has largely decoupled from this broader commodity strength.