China Port Stock Build Caps Rebound; Iron Ore Turns Range-Bound At High Levels

Iron ore futures rose then retreated today. The DCE most-traded I2701 contract closed at 687.5 yuan/mt, up 0.07% from the previous trading day. Spot prices of mainstream products at Qingdao port fell by about 3 yuan/mt on average. Trader activity was moderate, steel mill enquiries were few and spot trading volumes were low.

Iron ore stocks at 35 major Chinese ports stood at 149.13 million mt as of 6 November, up 1.08 million mt week-on-week, according to SMM. Arrivals fell markedly this week, yet port stocks still built slightly. Arrivals are expected to recover next week, and port stocks may build further.

On the demand side, average daily port outbound volume at the 35 ports fell 55,000 mt week-on-week to 3.12 million mt. Hot metal output at steel mills declined, and outbound volumes weakened with it. Momentum from the earlier short-covering rebound has faded, and pressure from the port stock build remains, limiting upside for futures. Iron ore prices are likely to turn range-bound at high levels in the short term, a downgrade from yesterday’s slightly firmer view. Watch arrival pace and changes in steel mill maintenance. Source: SMM

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