Hot Metal Output to Drop Significantly Next Week, Pressuring Iron Ore Prices to Remain in the Doldrums [SMM Brief Review]

Today, iron ore futures continued to strengthen and fluctuate rangebound, with the most-traded contract I2601 closing at 772.5 yuan, up 0.26% slightly from the previous trading day. Approaching the weekend, market transactions were sluggish. Mainstream spot cargo prices at ports were largely stable compared to the previous trading day. In Shandong, transaction prices for PB fines with over 61% specifications were in the range of 780–785 yuan, up 0–2 yuan/mt from yesterday; in Hebei, mainstream transaction prices for 60.8% PB fines were between 785–788 yuan/mt, basically flat compared to yesterday.

Since the onset of winter, weather-related disruptions have increased, and snow and rain are expected next week; coupled with environmental protection-driven production restrictions, transportation has also been somewhat constrained. To ensure production, some steel mills moderately increased their in-factory inventory, leading to a slight rise in port pick-up volume this week, which provided support for ore prices. However, looking ahead to next week, blast furnace maintenance is expected to increase, and hot metal production is likely to decline significantly. Ore prices are projected to be under pressure and fluctuate rangebound with a weaker bias.