[SMM Iron Ore] Coke price cut expectations ease bearish pressure on iron ore

Iron ore futures were firmer today. The DCE most-traded I2701 contract settled at 682 yuan/mt, up 1.56% from the previous session. Qingdao port spot prices rose by around 5-10 yuan/mt on average. Traders quoted in line with the market and sold as usual, with limited willingness to hold prices. Mill buying interest was weak and spot trading was moderate.

On the supply side, SMM data showed combined output from 16 major mining entities rose by around 22.98 million mt year on year in the first nine months of 2026. The big four miners contributed only 590,000 mt. Most of the growth came from Onslow, Simandou and NMDC in India. Excluding NMDC volumes sold mainly in the domestic market, the net increase reaching the seaborne market was around 14.93 million mt, and seaborne supply remains ample.

On the demand side, an SMM survey showed 17 blast furnaces went into maintenance in October, cutting average daily hot metal output by around 57,100 mt, mostly in north China. Another 14 furnaces restarted, adding around 63,000 mt/day. Maintenance cut October hot metal output by a net 7.88 million mt, 1 million mt more than in September. Average daily pig iron output fell by around 30,000 mt from September. Environmental curbs are tightening in north China as winter sets in, and hot metal output is likely to keep falling in November.

Mills remain loss-making and want to cut coke purchase prices, and expectations of a new round of coke price cuts are building. If the cuts go through, mill cost pressure will ease and negative feedback across the ferrous chain will have bottomed out, reducing bearish pressure on iron ore in the near term. Hot metal output still faces downside and mill buying is weak, which limits upside for iron ore, but downward drivers have weakened. Iron ore prices are likely to trade within a range in the near term.