Global Shipments and Port Arrivals Both Declined, the Loose Iron Ore Market Improved in the Short Term, and Futures Edged Up [SMM Imported Ore Daily Review]

Dalian iron ore futures were in the doldrums today after rising at the open. The most-traded contract, I2605, finally closed at 813 yuan/mt, up 0.06% from the previous trading session. Spot prices were basically stable from the previous trading day. Traders showed mediocre willingness to offer quotes, while steel mills made fewer inquiries; as of now, spot market transactions were limited.

SMM shipping data showed that the iron ore supply side tightened somewhat this week. Affected by the Australian cyclone, global total shipments fell 14.8% WoW to 28.66 million mt. By contrast, China’s total iron ore arrivals fell 1.5% WoW to 26.74 million mt. Meanwhile, port inventory still showed structural divergence: the destocking trend for high-grade fines was evident, but the destocking trend for lump ore slowed down somewhat.

Overall, tighter supply, coupled with steady growth on the demand side, determined that support for iron ore prices remained relatively strong this week. However, as the impact of weather factors on shipments weakened and Middle East-returned iron ore increasingly flowed into China, the supply side was still expected to remain relatively loose going forward. Therefore, iron ore prices were expected to continue a fluctuating trend at highs this week.