On the first trading day after the holiday, iron ore futures prices extended their decline, with the most-traded DCE contract I2701 closing at 682.5 yuan/mt, down 3.12% from the previous trading day. In the spot market, traders sold at prevailing prices, while steel mills made active inquiries but showed a strong desire to bargain down prices. Overall spot transactions were moderate, with spot prices falling by 10–15 yuan/mt.
From a fundamental perspective, although high ocean freight rates have somewhat constrained shipments from some non-mainstream mines, iron ore supply overall is still expected to grow. On the demand side, performance remains weak, with hot metal production at steel mills expected to decline. The supply-strong, demand-weak pattern is weighing on iron ore prices. Considering that steel mill profits have recovered somewhat after the decline in coke prices, the downside for hot metal production going forward is limited, and iron ore demand still has some support. Therefore, iron ore prices are expected to remain bearish in the short term, but with relatively limited downside.
