MMi Daily Iron Ore Report (February 16)

The continuous iron ore contract opened with a gap up today, showing strength in the early morning but weakening in the afternoon. The main contract, I2605, eventually closed at 811.5 CNY/ton, up 2.33% from the previous trading session.

[China Iron Ore Brief Review: Domestic Iron Ore Prices May Have Some Upside Room Next Week] This week, prices in China’s iron ore concentrates market edged up slightly. By region, prices in Tangshan, Qian'an, and Qianxi, Hebei rose slightly by 1-5 yuan/mt; western Liaoning areas including Chaoyang, Beipiao, and Jianping rose by 10-15 yuan/mt; east China also saw gains of 10-15 yuan/mt. Supply side, conditions remained relatively tight. Demand side, blast furnaces at steel mills previously under maintenance

This week, hot-rolled coil fluctuated higher, with the most-traded contract closing at 3,295 on Friday, up 0.52% on the day. In the spot market, weekly prices were raised by 30-70 yuan/mt, and transactions improved somewhat WoW. Looking ahead, sheets & plates fundamentals are unlikely to offer much narrative room, while cost support will play a more dominant role. Before there is any clear pickup in domestic and overseas demand for hot-rolled coil, prices are likely to continue to hold up well in the short term in line with cost trends. The most-traded contract is expected to fluctuate in a range of around 3,250-3,330.