Today, the DCE iron ore futures market exhibited a volatile trend with a downward bias. The dominant contract, I2605, closed at 783 RMB/tonne, representing a decline of 0.70% from the previous trading day. In the physical market, spot prices fell by 3–5 RMB compared to the prior session. While traders were active in offering quotes, steel mills maintained a cautious approach, procuring strictly on an as-needed basis. Consequently, overall trading sentiment remained relatively tepid. This week’s SMM production survey indicates that China’s daily average hot metal output stood at 2.3492 million tonnes, a slight week-on-week retreat of 7,000 tonnes. The primary driver for this unexpected decline—rather than the anticipated growth—was the postponement of scheduled restarts for certain blast furnaces (BFs) originally planned for this week, causing the actual pace of resumption to fall short of expectations. Looking ahead, as the Lunar New Year holiday approaches, market expectations are intensifying regarding tighter regulatory oversight on environmental restrictions and safety inspections. These potential policy disturbances may constrain the trajectory of BF resumptions, causing the recovery in hot metal output to lag behind market forecasts. Consequently, this lacklustre growth in hot metal production will directly dampen the fundamental consumption demand for iron ore. Given the shifting supplydemand fundamentals and weakening demand drivers, iron ore prices are expected to remain under pressure in the near term, likely trading within a weak and volatile range.

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Source: Metals Market Index (MMI)