Iron ore prices remain under pressure, with limited upside potential [SMM Brief Review]

Today, iron ore futures fluctuated in the doldrums, with the most-traded contract I2605 closing at 795 yuan/mt, up 1.21% from the previous trading day. Spot prices rose about 5-7 yuan/mt from the previous trading day. This week, pre-holiday restocking demand began to gradually release, traders' quoting enthusiasm was moderate, while steel mills actively inquired and procured. Overall, the spot transaction market improved slightly.

On the fundamental data side, according to the SMM survey this week, as of January 23, the total iron ore inventory across 35 ports nationwide reached 150.41 million mt, up 1.65 million mt WoW. The average daily port pick-up volume this week was 2.412 million mt, dropping back slightly by 34,000 mt WoW. Although port inventories maintained an upward trend, indicating persistent pressure on the supply side, demand-side restocking by steel mills ahead of the Chinese New Year had begun to gradually release, providing some bottom support for iron ore prices. Meanwhile, today's market sentiment was boosted by the sharp rise in the coking coal and coke sector, leading to a slight recovery in the overall trading atmosphere of the ferrous industry chain. Considering both supply-demand changes and market sentiment, iron ore prices are expected to fluctuate upward in the short term.