Port Inventory Is Expected to Decline, Iron Ore Prices May Fluctuate at High Levels [SMM Brief Comment]

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Today, DCE iron ore futures continued to fluctuate upward. The most-traded I2505 contract closed at 817, up 0.86% for the day. Traders sold goods based on market trends. Steel mills purchased as needed, with inquiries decreasing compared to the past two days. Market transactions were moderate today. In Shandong, mainstream transaction prices for PB fines were 805-808 yuan/mt, stable compared to yesterday; in Tangshan, PB fines transaction prices were around 820-825 yuan/mt, up by 0-5 yuan/mt from yesterday. As of February 7, SMM data showed that total inventory at 35 ports reached 149.91 million mt, up 4.63 million mt from pre-holiday levels and up 23.65 million mt YoY. The daily average port pick-up volume of imported ore was 2.584 million mt, down 610,000 mt from pre-holiday levels and down 350,000 mt YoY. This week, affected by the Chinese New Year holiday, steel mills suspended restocking during the holiday, leading to a significant decrease in port pick-up volumes and a noticeable accumulation of port inventories. Looking ahead to next week, post-holiday restocking by steel mills is expected to drive a rebound in port pick-up volumes, which may result in a decline in port inventories. In the short term, the supply-demand imbalance is relatively small, ore prices remain supported, and are likely to fluctuate at highs.