SMM daily comment on imported iron ore market (Aug 31)

SHANGHAI, Aug 31 (SMM) – The most-traded DCE 2401 iron ore contract closed up 3.54% at 849 yuan/mt today. Iron ore traders were enthusiastic about selling and most steel mills purchased in accordance with rigid demand. The overall transaction atmosphere was acceptable today. The transaction prices of PB fines were 915 yuan/mt in Shandong, up 20-25 yuan/mt compared with yesterday, and 914 yuan /mt in Hebei, up 24 yuan/mt. GDP and employment data released by the US overnight fell short of market expectations. On the domestic macro front, the release of manufacturing PMI data was basically flat, and traders held expectations for favorable policies taking effect, which energized investor confidence. Some steel mills maintained high molten iron production due to profits. However, follow-up routine maintenance may increase, coupled with the rapid rise in raw material prices, and the output of molten iron in blast furnace steel mills may decline due to shrinking profits. The gap betsween spot and futures prices has basically recovered. Considering that the current spot price trend is slightly insufficient to follow the upward trend, it is expected that the market trend may be strong and volatile in the short term. Spot prices may underperform futures contract in the short term.