Hot Metal Production Pulls Back MoM, Iron Ore Support Weakens [SMM Brief Review]

Today, DCE iron ore futures' most-traded contract I2605 retreated after a rapid rise, with the futures under pressure in the afternoon session and finally closed at 821 yuan/mt, up a slight 0.06% from the previous trading day. In the spot market, prices generally held steady with minimal fluctuations from the prior day; traders' quoting enthusiasm was mediocre, mostly adopting a market-following strategy, while steel mills maintained a cautious procurement pace, focusing mainly on essential restocking, resulting in an overall sluggish trading atmosphere. Fundamentally, due to blast furnace production resumptions falling short of expectations and some steel mills starting annual maintenance plans, the SMM-tracked blast furnace operating rate this week recorded 85.73%, down 0.26% WoW; daily average hot metal production pulled back to 2.3583 million mt, down 3,200 mt WoW. Although the hot metal data faced short-term pressure, the overall production recovery trend remained intact, supporting underlying iron ore demand; coupled with the gradual realization of pre-Chinese New Year mill restocking logic and positive market sentiment, ore price support at lower levels remained firm. However, current port spot cargo transactions continued sluggish, and inventory buildup-induced supply pressure limited upside room for iron ore prices. Overall, iron ore prices are expected to hover at highs in the near term.