Discount Policy Boosts Market Sentiment, Iron Ore Prices Shift from Weakness to Strength [SMM Brief Review]

Today, iron ore futures shifted from weak to strong, with the most-traded contract I2605 closing at 769, up 1.85% from the previous working day. Traders showed strong willingness to hold prices firm, while steel mills engaged in bargain down purchasing prices. Market transaction sentiment was moderate. In Shandong, PB fines traded at 780-790 yuan/mt, up 3-8 yuan/mt from yesterday; in Hebei, PB fines traded at 795-798 yuan/mt, up 8-10 yuan/mt from yesterday.

According to the SMM survey, on December 10, the blast furnace operating rate at 242 steel mills surveyed by SMM was 85.23%, down 0.68 percentage points MoM. Daily average hot metal production at the sampled steel mills was 2.3619 million mt, down 18,100 mt MoM. Iron ore demand continued to decline. However, on the macro front today, real estate interest subsidy policies stimulated market sentiment and boosted futures prices. Given that expectations for upcoming macro meetings remain, ore prices are expected to hold up well this week.