A slight increase in hot metal during the off-season supported the continued rise in iron ore prices [SMM Commentary]

Published: Jul 16, 2025 17:21

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Today, Dalian iron ore futures continued their strong upward trend, with the most-traded contract I2509 reaching a high of 777.5 and closing at 773, marking a daily increase of 1.05%. Traders were actively selling their goods. Steel mills purchased as needed, with some experiencing weaker sales of finished steel products and a corresponding decrease in purchase willingness. The market transaction atmosphere was average. The spread between futures and spot prices continued to narrow. In the Shandong region, the mainstream transaction price of PB fines was around 755 yuan/mt, up 1-5 yuan/mt from the previous day. In the Tangshan region, the transaction price of PB fines was around 770 yuan/mt, up 5 yuan/mt from the previous day.

According to the SMM survey, on July 19, the operating rate of blast furnaces at 242 steel mills surveyed by SMM was 87.41%, up 0.13 percentage points MoM. The daily average hot metal production of the sampled steel mills was 2.4166 million mt, up 4,800 mt MoM. Overall, the current overall profitability of steel mills is moderate, with low willingness for voluntary maintenance. Most of the currently idled blast furnaces are undergoing normal maintenance. There is a possibility of a continued slight increase in hot metal production over the next two weeks, providing strong support for ore prices. Coupled with the recent strengthening of macro expectations and optimistic market sentiment, it is expected that ore prices will continue to hold up well in the short term.

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