Drivers Remain Weak, Iron Ore in the Doldrums [SMM Brief Review]

Today, iron ore futures were in the doldrums. The most-traded contract I2605 closed at 813 yuan/mt, down 1.03% from the previous trading day. Spot prices dropped slightly by about 2–5 yuan/mt. Traders were active in offering prices but remained cautious, mainly restocking for rigid demand. Overall market trading sentiment was moderate.
Inventory data showed that, according to the latest SMM statistics, total iron ore inventories at ten ports reached 115.69 million mt this period, up 1.05 million mt WoW. All four major ore varieties saw inventory buildup, with lump ore posting the most significant increase of 3.7%.
Although global shipments plunged 15.8% at the beginning of the week, due to shipping cycle delays, this positive factor has yet to translate into port arrivals. In the short term, pressure from spot supply at ports persists.
Demand side, although the growth rate of daily average hot metal production slowed down recently, the overall level remained high. Further upside room is expected to be relatively optimistic, providing solid bottom support for ore prices.
Market sentiment side, rebar and hot-rolled coil inventories fell instead of rising amid the off-season this week. Meanwhile, coking coal and coke prices remained firm, offering some sentiment support to the iron ore market, which also belongs to the ferrous metals complex.
Considering the current tug-of-war between sellers and buyers, under the dual influence of inventory accumulation and rigid demand support, iron ore prices are expected to continue fluctuating at highs in the short term, with limited potential for a one-sided breakout.