SHANGHAI - On Thursday, DCE iron ore futures experienced a decline, closing the main contract at 965 yuan per metric ton. This 1.53% drop was attributed to a lack of activity among steel mills and an overall subdued trading sentiment in the market. Transactions for Platts 62% Fe iron ore fines (PBF), a benchmark for high-grade ore, were notably lower at key Chinese ports; with trades at Shandong port closing at 985 yuan/mt and those at Tangshan port ranging between 995-1000 yuan/mt.
The National Development and Reform Commission (NDRC) recently held a meeting that touched upon the iron ore sector, which spurred a rebound in the futures market. However, despite this positive signal, overall inventory levels have shown only a marginal increase. According to Shanghai Metals Market (SMM), the top ten ports in China reported a modest month-on-month inventory rise of 0.4%, reaching 76.79 million tons. Notably, there was an exception with a decrease observed in crude powder stocks.
Steel mills have recently seen some restoration of profitability, but the enthusiasm for raw material procurement has been dampened by the high prices of these inputs. As a result, buying interest has been curbed. Looking ahead, market analysts anticipate a short-term downtrend in mining prices given these prevailing conditions. The combination of restored profitability at steel mills yet elevated raw material costs presents a complex backdrop for the iron ore market as it navigates through these fluctuating dynamics.
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