[Brief Commentary on China's Iron Ore] Liaodong Regional Market Prices Set to Remain Stable in Short Term

The domestic ore market in eastern Liaoning remains largely stable. Local rainfall has had only limited impact on production at mines and beneficiation plants, yet their willingness to hold prices firm remains strong. However, trader inquiries are subdued, with purchases mainly made on a need-to restock basis at lower prices. Pressured by shrinking steel mill profits, the procurement pace for raw materials has slowed down, leaving intermediaries with little room to maneuver. To avoid risk, they show no willingness to purchase without contract orders, resulting in weak demand that continues to strongly constrain ore prices. On the other hand, most beneficiation plants face no pressure from inventory buildup, and their ROM was mostly sourced earlier at high costs. Under such high cost support, they are reluctant to sell at low prices, lending underlying support to ore prices. Taking all factors into account, the domestic ore market in eastern Liaoning is expected to mainly remain stable with a wait-and-see sentiment over the next couple of days. [SMM Steel]