Iron ore futures trended weaker today. The most-traded DCE I2609 contract closed at 739.5 yuan/mt, down 1.00%. Spot prices at Qingdao Port fell about 4-8 yuan/mt from the previous trading day. Traders' quoting enthusiasm was moderate, and steel mills were in a rather wait-and-see mood. As of now, spot transaction volumes were moderate.
According to the latest SMM survey, the blast furnace capacity utilization rate among sample steel mills was 89.49%, down 0.50 percentage point WoW. Their daily average hot metal output was 2.4247 million mt, down 13,500 mt WoW. Although the intensity of environmental protection-driven production restrictions fell short of expectations, hot metal output is still expected to continue its downward trend. Meanwhile, environmental protection and safety inspection factors have not yet subsided, and some steel mills may arrange temporary maintenance. Overall, blast furnace hot metal output is likely to continue declining in the near term, and iron ore demand is expected to remain weak. Therefore, iron ore prices are expected to consolidate with a bearish bias in the near term. [SMM Steel]
