Iron ore prices followed steel products to hold up well [SMM Brief Comment]

Today, iron ore futures continued to fluctuate upward, with the most-traded contract I2605 closing at 768, up 1.25% from the previous trading day. Traders actively sold goods; steel mills cautiously waited and purchased as needed. Market transactions were mainly driven by steel mill purchases, with a sluggish trading atmosphere. In Shandong, PB fines traded at 783-790 yuan/mt, up 3-5 yuan/mt from yesterday; in Hebei, PB fines traded at 795-803 yuan/mt, up 3-5 yuan/mt from yesterday.

According to an SMM survey, as of December 17, the blast furnace operating rate at 242 steel mills tracked by SMM was 84.64%, down 0.59 percentage points MoM. The daily average hot metal output at the sampled steel mills was 2.3477 million mt, down 14,200 mt MoM. Recently, affected by environmental protection-driven production restrictions in the north, some steel mills have suspended blast furnaces for maintenance or idled them, leading to a continued decline in hot metal output. The fundamental supply-demand dynamics of iron ore remain in the doldrums. However, considering the short-term drop in production, which is positive for steel prices, coupled with some recovery in steel mill profits, market pessimism has eased, driving a slight rebound in ore prices.