Hot Metal Production Declines but Pre-Holiday Stockpiling Grows; Iron Ore Prices Strengthen in the Afternoon [SMM Iron Ore Daily Review]

Iron ore prices strengthened somewhat in the afternoon today. The most-traded DCE contract I2701 closed at 709 yuan/mt, edging up 0.14% from the previous trading day. Spot transaction prices at Qingdao Port were basically stable compared with yesterday, with high-grade IOCJ fines and low-grade mixed fines holding firm. Traders sold in line with market conditions, and some steel mills made low-price purchases, leaving overall market trading sentiment moderate.
According to an SMM survey, steel mill losses have recently deepened. Combined with persistently weak end-use demand, blast furnace maintenance at steel mills has increased. On September 16, the operating rate of blast furnaces at the 242 steel mills tracked by SMM stood at 88.93%, down 0.15 percentage point WoW. The sample mills' daily average hot metal production was 2.3991 million mt, down 3,700 mt WoW. However, some steel mills have already begun pre-holiday stockpiling, and overall iron ore demand still provides support for prices. In the short term, iron ore prices face difficulty moving either up or down and may continue to move sideways within a range.