Iron Ore Futures Rallied in Late Trading, Driving Spot Prices Up by 5 Yuan/mt [SMM Brief Review]

Dalian iron ore futures traded in the doldrums this morning but surged significantly near the close. The most-traded contract I2605 ultimately settled at 783 yuan, up a slight 0.71% from the previous working day. Traders showed moderate willingness to sell; approaching the weekend, steel mills' purchase willingness was average, with some mills purchasing as needed. Market transaction sentiment was moderate. In Shandong, the transaction price for PB fines was 790-795 yuan/mt, up 3-5 yuan/mt from yesterday; in Hebei, the transaction price for PB fines was 805-813 yuan/mt, also up 3-5 yuan/mt from yesterday.

According to SMM's 35-port inventory data, port arrivals remained high this week, but steel mills' purchase willingness was average, port pick-up volume continued its slight decline, and the pace of port inventory accumulation accelerated. Although the current iron ore market has structural support due to limited availability of medium-grade resources, high inventory continues to cap upside price potential. Considering that hot metal production is expected to gradually rebound after the holiday, coupled with positive policy expectations for year-end real estate and infrastructure sectors and monetary policy support, ore prices are expected to have a chance to rebound in January.