Macro Vacuum, High Inventory Suppressed Upward Momentum, Iron Ore Closed Down Slightly by 0.8

Dalian iron ore futures were in the doldrums today after rising at the open. The most-traded contract, I2605, finally closed at 808 yuan/mt, down 0.80% from the previous trading session. Spot prices fell by about 5 yuan from the previous trading day. Traders were moderately active in offering quotes, while steel mills mainly restocked to meet rigid demand, with inquiries remaining cautious; as of now, spot market transactions were relatively sluggish.

On the fundamentals, SMM’s weekly maintenance statistics showed that blast furnace maintenance affected hot metal production by 1.4281 million mt this week, down 186,100 mt YoY. The impact of maintenance was expected to ease further next week, by about 40,000 mt. Therefore, rigid demand for iron ore remained relatively strong this week, providing solid downward support for ore prices. However, iron ore prices faced clear upward pressure. On the one hand, port inventory remained at a relatively high level (about 155 million mt); on the other hand, the relatively high price level suppressed spot market trading activity, leaving insufficient upward momentum for iron ore. In summary, iron ore prices were expected to fluctuate within a range in the short term, with the overall market remaining in a stagnant state.