Frequent favourable macro policies are expected to drive iron ore prices to continue fluctuating upward next week

On Monday, iron ore prices continued last week's decline, dropping sharply to a new low. However, on September 24, the central bank introduced a series of monetary policies, quickly shifting market sentiment and causing prices to rebound rapidly. Subsequently, the Politburo held an early meeting on September 26, releasing significant fiscal policies again, further boosting market confidence and driving prices to rise continuously. Fundamentally, there was little change. Due to some mines ramping up production at the end of the quarter, global shipments increased significantly, and pig iron production saw a slight uptick. Coupled with pre-holiday restocking demand, iron ore demand increased noticeably. Although port inventory decreased, it remained at a high level, putting pressure on spot prices, which struggled to rise, and the spread between futures and spot prices continued to narrow. Regarding port prices, the spot price of PB fines in Shandong increased by 10-20 yuan/mt WoW.

Looking ahead to next week, overseas shipments are expected to remain high, and the increase in pig iron production is likely to expand. Considering that pre-holiday restocking is mostly complete, overall iron ore demand may decline. However, the continued release of favourable macro policies keeps future market expectations optimistic, with strong market confidence, and iron ore prices are expected to fluctuate upward.