Market News Influences Iron Ore Prices to Continue Falling [SMM Brief Comment]

Today, the iron ore futures opened with a sharp decline, then fluctuated rangebound and rebounded. The most-traded contract I2605 finally closed at 789.5 yuan/mt, down 1% from the previous trading day. Spot prices dropped slightly by about 3-7 yuan/mt compared to the previous trading day. Traders' quoting enthusiasm was mediocre, mostly following the market trend, while steel mills' procurement focused on restocking as needed, with cautious inquiries. Overall, the market trading atmosphere was mediocre.

On the fundamental data side, according to the SMM survey, the hot metal impact caused by blast furnace maintenance this week recorded 2.0283 million mt, up 22,800 mt WoW. Demand side, the marginal change affected by maintenance was relatively small, and hot metal production remained stable overall. In terms of the supply-demand structure, with the opening of the Chinese New Year restocking window, industry chain inventory is expected to shift from ports to steel mills. However, from a total balance perspective, the overall supply landscape remains relatively loose, with limited fundamental support. On the market sentiment level, affected by expectations of policy tightening triggered by recent safety incidents, the market is concerned that blast furnace production will face stricter safety supervision. Coupled with the approaching Chinese New Year, rumors of environmental protection-driven production restrictions have resurfaced, leading to increased risk-averse sentiment in the market and a gradually strengthening bearish atmosphere. Taking into account the current supply-demand situation and expectations of policy disruptions, iron ore prices are expected to face significant resistance in the short term, making it difficult to form an effective breakthrough, and are likely to maintain a pressured, rangebound fluctuation trend.