Coke price cuts fail to translate into procurement growth; ore prices continue to consolidate at lows [SMM Iron Ore Daily Review]

DCE iron ore futures were mediocre today with limited fluctuations. The most-traded I2701 contract closed at 683 yuan/mt, down 0.07% from the previous trading day. Spot prices at Qingdao Port fell by an average of 0-2 yuan/mt. Trader activity was low, and steel mill purchases were mostly need-based, with few inquiries. Overall market trading was sluggish.

From a fundamental perspective, although supply contracted slightly, the overall oversupply pattern remained unchanged. In addition, with blast furnace maintenance news emerging after the holiday, the market generally held pessimistic expectations for post-holiday iron ore demand. Purchase willingness was low, and prices therefore consolidated at lows. Notably, the coke price cut improved steel mill profits, but against the backdrop of weak end-use demand, this has not yet translated into actual growth in iron ore purchases. Overall, short-term iron ore demand is likely to remain at low levels, and ore prices may continue their consolidation pattern at lows. [SMM Steel]