Iron Ore Futures Drop 3.17% Amidst Overseas Fund Outflow and Easing Sentiment
Iron Ore Futures Experience a Significant Downturn
The DCE iron ore futures witnessed a notable 3.17% drop on Friday, influenced by the performance of the stock market and an outflow of overseas funds. This outflow has had a direct impact on investor confidence in the domestic financial market, leading to an ease in macroeconomic sentiment. As a result of these factors, the main contract closed at 839, marking a significant downturn.
Steel Mills Maintain Active Purchases
Despite the drop in iron ore futures, steel mills continue to actively purchase the commodity. PBF deals at Shandong and Tangshan ports were priced at 910 yuan/mt and 935-945 yuan/mt respectively, indicating sustained demand for iron ore.
Declining Inventory Levels
However, inventory levels have been on a declining trend. SMM tracking showed a decrease of 550,000 tons across 35 ports to 105.01 million tons. This marks a year-on-year decrease of 211.7 million tons and represents the sixth consecutive period of decrease.
Reduced Molten Iron Production Impacts Port Clearance Volume
Contributing to this trend is the reduction in molten iron production at steel plants, which has led to poor profits for some finished product varieties. The daily average port clearance volume of imported mines fell by 124,000 tons this week, causing a significant decline in port dredging volume.
Potential Turning Point for Iron Ore Prices
This continuous decrease in inventory could potentially signal a turning point that may put short-term iron ore prices under pressure. As the reduction in inventory continues, it is likely that the market will closely monitor these developments.
This article offers an in-depth analysis of the recent drop in iron ore futures and its impact on the market. It provides valuable insights into the factors influencing investor confidence and the ongoing trends in steel mills and inventory levels. The article highlights the potential implications for iron ore prices, offering a comprehensive overview of the current market landscape.
