Iron ore fell for a second day as deteriorating profit margins at Chinese steel mills and continued US-Iran hostilities clouded the demand outlook. The decline reflects growing concerns over China's steel sector profitability, where losses deepen amid weak construction and manufacturing activity. Simultaneously, escalating tensions near the Strait of Hormuz threaten global shipping routes, adding geopolitical risk to commodity markets.

Traders are monitoring whether Beijing will unleash fresh stimulus to support infrastructure spending, which could revive ore demand. However, near-term sentiment remains bearish as mills cut output to stem losses, reducing raw material consumption. The dual headwinds of domestic industrial weakness and Middle East instability create a challenging environment for bulk commodities, with iron ore particularly vulnerable given its heavy reliance on Chinese demand.