Today, Dalian iron ore futures exhibited a predominantly sideways, oscillating trend. The most-traded I2605 contract closed at 752 RMB per tonne, representing a marginal increase of 0.04% from the previous trading session. In the physical market, spot prices rose by 0-2 RMB from the prior day. Offering senment amongst traders was moderate, while steel mill procurement was driven primarily by immediate requirements, with most adopting a wait-and-see stance. Consequently, the overall trading atmosphere in the spot market was somewhat subdued. According to this week’s SMM survey, average daily hot metal production stood at 2.3878 million tonnes, a week-on-week decrease of 5,900 tonnes. This decline is mainly a ributed to production restrictions imposed for environmental control purposes. With a further eight blast furnaces scheduled to commence maintenance next week, the downward trend in overall hot metal output is set to continue. This reduction in hot metal production is expected to act as a bearish factor for iron ore demand. Concurrently, on the supply side, there is a possibility that iron ore cargoes originally destined for the Middle East could be diverted to China in the event of a blockade of the Strait of Hormuz, which would poten ally exacerbate the easing of supply conditions. Therefore, with strong supply fundamentals and weakening demand, significant downward pressure on iron ore prices remains evident. In the short term, prices are expected to continue oscillating within a range or follow a predominantly weak trend.

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Source: Metals Market Index (MMI)