MMi Daily Iron Ore Report (September 9)

The domestic ore market in eastern Liaoning remained broadly stable, with sellers holding prices firm and taking a wait-and-see stance, while buyers made low offers based on need. Both supply and demand were cautious, and market shipments were mostly from earlier orders. In recent days, coke and imported ore prices have risen to some extent, pushing steel mill costs higher and weighing on production enthusiasm.

Indonesia is currently navigating a confluence of climate-driven supply disruptions, the most consequential of which is the El Niño-induced water shortage affecting the Indonesia Morowali Industrial Park (IMIP) and the broader Kalimantan coal corridor. While IMIP's steel producers have absorbed some of the impact, coking coal and coke producers have been hit disproportionately harder, given the water-intensive nature of the coking process.

Today, the most-traded HRC contract settled at 3,385, up 0.15% for the day. In the spot market, cold-rolled and hot-rolled prices held steady. Trading was relatively moderate today, dominated by low-price deals, with no additional end-use demand release. Today's HRC city inventory data showed slight destocking in Shanghai, Lecong, and Zhangjiagang, while Tangshan saw inventory buildup. Overall, HRC social inventory is expected to see a slight decline this week. On the cost side, supply and demand supported a firm coking coal and coke market, while iron ore prices also showed a consolidation pattern due to demand and cost factors, providing relatively strong cost support for HRC. In the short term, with strengthening cost support for HRC but insufficient follow-through from end-use demand, the most-traded HRC contract price is expected to continue to consolidate at highs.