MMi Daily Iron Ore Report (July 22 )

Iron ore futures were weaker today. The DCE most-traded I2701 contract settled at 718 yuan/mt, down 1.78% from the previous session. Qingdao port spot prices fell 8-13 yuan/mt on average. Traders were reasonably active and mills bought largely to cover immediate needs. Spot trading was thin.

Prices in the domestic ore market in the Liaodong region showed no significant fluctuations. Trader inquiries were weak, with bids mostly on the low side, but ore processors held back from selling, and most were reluctant to accept prices below their psychological expectations. Both sides traded cautiously and on an as-needed basis, with market shipments mostly consisting of earlier orders. Steel mills were largely operating at a loss, and with a strong focus on cost control, raw material inventories were mostly kept at low levels. There was little room for growth in iron ore demand, which constrained upward movement in ore prices. However, ROM ore supply was insufficient, and beneficiation plants were operating at low utilization rates.