What Happened
Steel Authority of India (SAIL) reported strong growth in its Q4 FY2025-26 earnings call, beating expectations on production volumes and revenue. The result signals improving steel demand from one of the world’s largest steel producers, a key driver for iron ore consumption. Iron ore (62% Fe CFR China) is currently trading near $105/tonne, holding above the critical $100 support level after a period of consolidation.
Key Levels
- Support 1: $100/tonne โ a major psychological floor and prior demand zone for iron ore
- Support 2: $95/tonne โ the multi-month low that buyers defended strongly in early 2025
- Resistance 1: $110/tonne โ near-term ceiling where sellers have emerged in recent weeks
- Resistance 2: $118/tonne โ the swing high from February 2025, a level bulls need to reclaim
Technical Picture
Iron ore is sitting in a neutral-to-recovering trend. Prices are trading above the 50-day moving average (~$102/tonne) but remain below the 200-day moving average (~$112/tonne), suggesting the medium-term trend is still under pressure. RSI is hovering around 52 โ neither overbought nor oversold โ giving room for a move in either direction.
On the ASX, BHP is trading near $43.20 with support at $41.80 and $40.50, while resistance sits at $44.60 and $46.00. RIO is at approximately $118.50, with support at $115.00 and $112.00, and resistance at $122.00 and $125.50.
What Traders Are Watching
A clean break above $110/tonne in iron ore would likely lift BHP and RIO meaningfully. Traders are also watching Chinese steel mill margins โ if profitability improves, restocking activity could accelerate demand. Conversely, a drop below $100/tonne would be a bearish signal for the entire materials sector on the ASX.
Bias
Cautiously Bullish. SAIL’s strong earnings suggest end-user steel demand is holding up better than feared. If Chinese demand data confirms this trend over coming weeks, iron ore and ASX miners could have room to push higher toward resistance.
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