Iron ore futures moved sideways today. The most-traded DCE contract I2701 closed at 713.5 yuan/mt, unchanged from the previous trading day. Spot prices at Qingdao Port fell by an average of 1 yuan/mt. Trader activity was moderate, while steel mills remained largely wait-and-see.
This week, iron ore prices were supported by pre-holiday restocking demand, rising ocean freight rates, and expectations of tighter Brazilian supply, with the weekly average price up about 2 yuan WoW. Fundamentals-wise, overseas shipments are expected to rebound slightly, but port arrivals are already at highs and may pull back modestly, with overall levels staying high. On the demand side, blast furnace maintenance increased this week, with some maintenance plans scheduled to start from end-September to early October. Hot metal production is expected to continue declining next week, and the decline may widen further after October. Combined with the end of pre-holiday restocking, iron ore demand faces a notable contraction, and the bearish fundamental picture is weighing on ore prices. However, due to risk-off sentiment in the market, some funds exited positions, and futures are expected to see relatively small fluctuations. Overall, iron ore prices are expected to trade in a narrow range next week, likely extending the current consolidation pattern. [SMM Steel]
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