Today, the DCE iron ore market exhibited volatility during the morning session, followed by an initial rally and subsequent retreat in the afternoon. The benchmark contract, I2605, ultimately closed flat at 761.5 RMB/tonne, unchanged from the previous trading session. Conversely, spot prices in the physical market recorded an increase of 2–8 RMB/tonne. Traders showed moderate enthusiasm for quoting, while steel mills focused primarily on rigid demand procurement with limited inquiries. Overall, the market trading atmosphere remained average. Looking ahead, the volume of hot metal output lost to facility maintenance declined by 169,100 tonnes week-on-week. This reduction has driven daily average hot metal output to stabilize and rebound, signalling a substantive improvement in the rigid demand for iron ore. However, the market continues to face suppression from inventory levels; both visible port inventories and in-plant inventories at steel mills remain elevated. These ample inventory levels act as an effective buffer against raw material procurement needs, creating a distinct lag in the transmission of incremental rigid demand to the spot market. On balance, given that inventory pressure has not yet been effectively alleviated and the pace of demand release remains relatively gradual, iron ore prices are unlikely to achieve a unilateral breakout in the short term. The market will in all probability continue its pattern of low-level volatility.

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Source: Metals Market Index (MMI)