Today, the Dalian Commodity Exchange iron ore futures experienced a decline in the morning session, followed by a rebound during the afternoon trading period. The most active I2609 contract closed at 758.5 RMB per tonne, reflecting a marginal decrease of 0.07 per cent from the previous trading session. Physical spot prices declined by 2 to 4 RMB per tonne compared to the prior day. Trader activity was moderate, with offers exhibiting tempered enthusiasm, while steelmakers continued to purchase strictly on an as-needed basis. Consequently, market inquiries remained limited, resulting in a largely subdued physical trading environment. During this week, hot metal production loss aƩributed to blast furnace maintenance totals 1.2915 million tonnes, representing a week-on-week reduction of 42,500 tonnes. This indicates a slowdown in the rate of output decline. It is anticipated that the impact of maintenance will decrease further by 14,000 tonnes next week. Currently, overall iron ore demand remains close to peak levels, providing strong downward support for underlying iron ore prices. In terms of macroeconomic developments, trade restrictions on certain restricted varieties have been gradually eased. However, due to prevailing extraordinary circumstances, port clearance remains feasible only for cargoes meeting very specific criteria. In the near term, supply is expected to increase marginally, although this has yet to exert significant downward pressure on prices across the market. Overall, supported by strong demand fundamentals and a clear trend of end-users replenishing inventories during price dips, iron ore prices are projected to maintain a fundamentally resilient yet volatile trajectory in the short term. Once current structural supply deficits are addressed systematically, it is possible that iron ore valuations may shift towards a softer operating environment.

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Source: Metals Market Index (MMI)