Hot Metal Production Rebounds Slightly, Supporting Iron Ore Prices to Stabilize [SMM Brief Review]

Iron ore futures stabilized and rebounded today, holding up well throughout the day. The most-traded contract I2601 finally closed at 774 yuan, up 1.38% slightly from the previous working day. The mainstream spot cargo prices at ports rose 5-10 yuan/mt from the previous working day, with PB fines transaction prices in Shandong region at 780-781 yuan, up 5-8 yuan/mt from yesterday; PB fines transaction prices in Hebei region at 790-793 yuan/mt, up 8-10 yuan/mt from yesterday.
According to the SMM survey, on November 12, the blast furnace operating rate at 242 steel mills surveyed by SMM was 86.64%, up 0.24 percentage point MoM. The daily average hot metal production at the sampled steel mills was 2.3977 million mt, up 4,900 mt MoM. This week, the number of blast furnace production resumptions exceeded that of maintenance. Hot metal production remained high, providing some support to ore prices. However, looking ahead to next week, the number of blast furnace maintenance is expected to increase, and the decline in hot metal production will widen, leading to a significant reduction in overall iron ore demand. Meanwhile, the Simandou iron ore project officially commenced production yesterday, with the first shipment set to be sent to China, increasing the overall supply pressure on iron ore in the future. From a medium and long-term perspective, iron ore prices remain bearish.