Market expectations are weak, iron ore prices continue to be in the doldrums [SMM Brief Review]

Published: Jan 27, 2026 17:47

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DCE iron ore futures opened weaker in the morning session but rebounded slightly in the afternoon. The most-traded contract I2605 closed at 788 yuan/mt, down 0.51% from the previous trading day. Spot prices rose 2-3 yuan from the previous day. Traders' quoting enthusiasm was moderate, mostly following the market trend. Steel mills purchased as needed and actively inquired, with the overall trading atmosphere showing slight improvement.
This week, SMM statistics showed that the impact from maintenance on blast furnaces affected pig iron production at 2.0264 million mt, down 1,900 mt WoW from the previous period. The impact from maintenance next week is expected to decrease by 172,000 mt WoW from this week. Overall iron ore demand showed an improving trend.
Although Brazil entered the traditional rainy season, with production and shipments expected to see a seasonal pullback, combined with marginal improvement in demand, this theoretically favors supply contraction. However, current port inventory continues to fluctuate at highs, and the inventory buildup trend has not shown significant improvement in the short term. The suppressive effect from the massive inventory base completely offsets the positive impact of reduced shipments, resulting in heavy resistance for futures prices. Iron ore prices are expected to struggle to trend unilaterally in the short term and are likely to maintain sideways movement.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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