SMM Daily Comment On Imported Iron Ore Market (Oct 7)

SHANGHAI, Oct 8(SMM) – Since there was no future guidance yesterday, market participants tended to be more cautious. SGC TSI iron ore CFR China Index dropped slightly, dragging down domestic spot prices. Iron ore traders were highly motivated to ship. Having consumed part of raw material stocks during the National Day holiday, steel mills actively inquired and purchased for inventory replenishment. The overall transaction atmosphere was acceptable. During the holiday, domestic manufacturing PMI once again stood at 50%. The overseas US debt crisis and government incidents aroused market worries. Despite these, market still held certain expectations for a rebound in consumption after the holiday. In the fundamentals, global iron ore shipments rose significantly MoM while domestic port arrivals declined slightly. Shrinking profits diminished the enthusiasm of some steel mills to start operations, causing pig iron output to drop. Considering the low pressure on port inventory, iron ore prices are hard to see a sharp reduction at present, and it is expected to remain volatile in the short term.