Long-term agreement negotiations weigh on purchase willingness; ore prices may consolidate on a subdued note in the near term [SMM Iron Ore Daily Review]

The domestic ore market in eastern Liaoning remained broadly stable, with sellers holding prices firm and taking a wait-and-see stance, while buyers made low offers based on need. Both supply and demand were cautious, and market shipments were mostly from earlier orders. In recent days, coke and imported ore prices have risen to some extent, pushing steel mill costs higher and weighing on production enthusiasm.

Iron ore futures opened weaker on Wednesday before recovering through the session. The DCE most-traded I2701 contract settled at 738.5 yuan/mt, down 0.27% from the previous session. Qingdao port spot prices fell by an average of around 8 yuan/mt, with traders showing only moderate enthusiasm in offering and mills reluctant to buy. Overall spot trading was subdued.

Indonesia is currently navigating a confluence of climate-driven supply disruptions, the most consequential of which is the El Niño-induced water shortage affecting the Indonesia Morowali Industrial Park (IMIP) and the broader Kalimantan coal corridor. While IMIP's steel producers have absorbed some of the impact, coking coal and coke producers have been hit disproportionately harder, given the water-intensive nature of the coking process.