The rapid rise in iron ore prices has suppressed steel mills' purchase willingness [SMM Brief Comment].

Published: Jan 7, 2026 17:39

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Today, iron ore futures continued to rise sharply. The most-traded contract I2605 closed at 828, up 4.09 from the previous working day. Traders were active in selling; steel mills' inquiries increased, but ore prices rose too quickly, causing mills to fear high prices, resulting in limited actual transactions. Market trading sentiment was moderate. In Shandong, PB fines traded at 825-830 yuan/mt, up 20-25 yuan/mt from yesterday; in Hebei, PB fines traded at 835-840 yuan/mt, up 17-20 yuan/mt from yesterday.

According to the SMM survey, on January 7, the blast furnace operating rate at 242 steel mills tracked by SMM was 85.99%, up 0.84 percentage points MoM. Daily average hot metal production at the sampled mills was 2.3615 million mt, up 15,800 mt MoM. Based on SMM's blast furnace tracking, hot metal production continued to rebound in January. Meanwhile, expectations for pre-Chinese New Year restocking remained strong, providing solid support for ore prices. In addition, recent low valuations in the ferrous sector attracted funds, lifting futures prices. In the short term, market sentiment is strong, and prices may hold up well.

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