Houthi’s attack on merchant ships in Red Sea and falling deposit interest rates shored up market sentiment last week, and ferrous metal market started to pick up. On the fundamentals side, pig iron output still dropped last week, but the decline slowed down significantly, while iron ore inventory at ports remained tight. Therefore, fundamentals still offered support for iron ore price. Under this circumstance, iron ore price first weakened and then strengthened last week.
Looking at this week, recent overseas shipments of mines surged towards the end of this year. Port arrivals nosedived two weeks ago amid weather fallout, but picked up last week, and will mount aggressively. With more plans of annual BF-related maintenance, pig iron output may plummet, but meanwhile steel mills with low ore inventory may refill stocks ahead of the Spring Festival. Under this circumstance, overall iron ore demand may linger. It is expected that iron ore prices may continue to be volatile this week.
