SMM daily comment on domestic iron ore market (Aug 15)

SHANGHAI, Aug 16 (SMM) –

The most-traded DCE 2401 iron ore contract closed up 1.58% at 740 yuan/mt yesterday. Selling appetites from iron ore traders picked up, while steel mills purchased ores on a need-to basis. The overall market trading was passable. The transaction prices of PB fines in Shandong were mostly 830-835 yuan/mt /mt, up 2-7 yuan/mt on the day. The transaction prices of PB fines in Tangshan were 840 yuan/mt, flat with yesterday.

MLF interest rate cut released yesterday shored up market confidence. Participants believed that this interest rate cut will continue to reduce the financing cost of the real economy and promote economic recovery. However, macro data released yesterday revealed that investment in real estate development declined compared with last month and last year, which dented some optimism. Bolstered by strong supply-demand fundamentals and no definite document on crude steel output limit, short-term iron ore market may swing on a bullish footing.