I. Bottom Line & Directional Bias
Bearish. Iron Ore I2701 [10-14 settle] CNY 674.5/t, -0.81%; 5-day -4.06%, 20-day -9.47%, at the 4.2nd percentile of the 20-day range 671–742; night session (10-14, 21:05–23:00) low 669.5, night session close 671, -0.45% vs day session close. Three core reasons: first, price is stepping down along the 5-day and 20-day moving averages, with two consecutive lower daily closes on 10-13 and 10-14 (677, 674), and the 10-14 low of 671 has touched the lower bound of the 20-day range, confirming a clear trend deterioration. Second, the funding side shows active shorts: main contract open interest 642,862 lots (+12,466), main contract notional CNY 43.33bn, daily change +CNY 840m, which together with the price decline constitutes an open interest build on falling prices; top-20 seats net short 38,042 lots, +7,540 lots on the day, indicating rising short concentration. Third, international markets are weakening in sync: SGX FEF=F [10-14 settle] USD 90.25, 20-day -6.23%, at the 0.7th percentile of the 20-day range, showing resonance between international and China markets. Invalidation conditions: daily close back above pivot P 679 and a break of R1 684, or SGX holding above R1 90.983; on the downside, watch S1 672 and the 20-day low 671.
II. Price Action & Technicals
Iron Ore I2701 [10-14 settle] CNY 674.5/t, -0.81% (vs prior settle), [10-14 close] 674; 5-day -4.06%, 20-day -9.47%, 20-day range 671–742, position at the 4.2nd percentile, near the lower bound. ATR14 is 10.54 (1.56%, full intraday range), RV20 is 14.2%, with realized volatility in the higher end of the year-to-date range. Classic pivots from [10-13] H/L/C: P 679, R1 684, S1 672; the current price of 674.5 sits between P and S1, only about 0.24 ATR from S1 and about 0.43 ATR from P; the dense pivot zone exerts short-term pull, but the gap between S1 and the current price is less than half an ATR, so it should not be used as a standalone trade level. The last completed weekly bar (2026-10-08 to 10-09) opened 692, high 698, low 678.5, closed 682.5, weekly change -2.85%; this week (starting 10-12, 3 sessions) is not yet closed, tentatively 674 (-1.25%), so no weekly conclusion is drawn. Last 5 daily bars: 10-08 close 682.5, 10-09 close 682.5, 10-12 close 683, 10-13 close 677, 10-14 close 674, showing a stair-step decline, with consecutive lower closes on 10-13 and 10-14 and lows stepping down day by day (674→671). China night session recap (10-14 21:05–23:00): open 674.5, high 676.5, low 669.5, close 671, -0.45% vs day session close and -0.52% vs settle; the night session briefly pierced S1 672 and the 20-day low 671. If the day session confirms an effective break below, the downside reference is the area around the round number 660, roughly 1 ATR below the 20-day low 671; conversely, if the daily close regains above pivot P 679, the bearish structure would be weakened.
III. Supply-Demand Balance & Fundamental Drivers
On the price side, I2701 [10-14 settle] CNY 674.5/t, 20-day -9.47%, at the 4.2nd percentile of the 20-day range; SGX FEF=F [10-14 settle] USD 90.25, 20-day -6.23%, at the 0.7th percentile of the 20-day range and at an extremely low position within the 52-week range 90.2–111.85, with the international market approaching the 52-week low; the synchronized weakness in international and China markets reflects a downward shift in the global iron ore pricing center. After China tax-adjusted conversion, the premium to FEF=F is +7.3% [10-14] (5 days prior +7.94%); the premium has narrowed but remains positive, indicating that the China market is still relatively expensive versus the international market and the import window tends to be open; the import profit proxy does not include freight or premium/discount and is for directional reference only. On macro transmission, this report date (10-15) will see the US core PPI, core retail sales, PPI and retail sales released in the evening (Beijing time 20:30), Fed Chair Warsh speaks on 10-16, China releases fixed asset investment, industrial value added, retail sales and real estate investment data on 10-19, and LPR (1Y prior 3%, 5Y prior 3.5%) and GDP on 10-20; these events transmit to the black complex via the USD and China demand expectations, and if China investment and property data come in weak, iron ore demand-side pressure will intensify. Seasonally, over the past 13 years the same-date 20-session average is +0.61%, median -0.32%, up in 6 of 13 years, best 2016 +41.86%, worst 2021 -24.46%; the sample is limited and for background only.
IV. Positioning & Fund Flows
Positioning points to active shorts. Main contract I2701 [10-14] main open interest 642,862 lots, +12,466 lots on the day; main notional CNY 43.33bn, daily change +CNY 840m, against a price change of -0.81%, constituting an open interest build on falling prices with shorts taking the initiative. Top-20 seats aggregate for the instrument: longs 899,388 lots (+18,030), shorts 937,430 lots (+10,490), net short 38,042 lots, +7,540 lots on the day [10-14]; short concentration is rising and the net short scale is expanding, consistent with the direction of the price decline, with no sustained reverse divergence between price and positioning. ^GVZ (gold implied volatility) 22.09 [10-13], 1Y percentile 9%; ^VXSLV (silver implied volatility) 36.33 [10-09]; ^VIX 16.87 [10-14], 1Y percentile 46%. Iron ore RV20 is 14.2%, higher than the equity and precious metals volatility environment implied by GVZ and VIX, showing that the black complex's own realized volatility is relatively active; if the upcoming event windows (10-19 China data, 10-20 LPR) lift implied volatility, the options side will price in event risk.
V. Cross-Asset Relative Value & International vs China Markets
Oil-gold ratio 0.0231, 1Y percentile 96.83%, 3Y percentile 53.04%; gold-silver ratio 73.52, 1Y percentile 87.3%, 3Y percentile 29.23%, at a one-year high and a three-year low, with gold relatively expensive and silver relatively weak. These ratios have no direct pricing transmission to iron ore and serve only as a macro risk appetite reference. On international vs China markets, iron ore is comparable: DCE.I vs FEF=F China tax-adjusted premium +7.3% [10-14] (5 days prior +7.94%); a positive value indicates China is relatively expensive and the import window tends to be open, but the premium has narrowed by 0.64 percentage points versus 5 days prior, showing that China's relative strength versus the international market is fading; this ratio excludes freight and premium/discount and is only an import P&L proxy. USD and rates comparison: DXY 102.53 [10-14], +0.34%; ^TNX (US 10Y Treasury yield) 5.19, -0.52%; a firmer USD weighs on USD-denominated SGX iron ore, corroborating FEF=F at the 0.7th percentile of the 20-day range. Taken together, the narrowing China premium alongside the international market near the 52-week low points to a synchronized weakness between international and China markets.
VI. Historical Statistics & Seasonality
On seasonality, this section only cites the statistical block for the same date over the past 13 years for 20 sessions, without extrapolation. Within the sample, the average is +0.61%, the median -0.32%, up in 6 of 13 years, i.e. a win rate of about 46%, less than half; the distribution is very wide, with the best at 2016 +41.86% and the worst at 2021 -24.46%, a gap of more than 66 percentage points between the two extremes, indicating that this window is dominated by macro and policy cycles and has poor statistical stability. Currently I2701 [10-14 settle] CNY 674.5/t, 20-day -9.47%, at the 4.2nd percentile of the 20-day range 671–742, which is consistent with the direction of a negative seasonal median but contradicts the positive average, so seasonality is background rather than a trading basis. Combining the trend and positioning structure noted earlier (Section II and Section IV), the median of -0.32% provides weak support for the bearish conclusion, while the extreme positive return in 2016 warns that out-of-sample risk cannot be ignored if policy stimulus emerges or if the international market FEF=F strengthens from above R1 90.983. The sample is only 13 years and a single window, with limited confidence, and no target price is set on this basis.
VII. Scenario Analysis
Scenario analysis follows the key levels from the first half: pivot P 679, R1 684, S1 672, 20-day low 671; internationally, FEF=F corresponds to P 90.617, R1 90.983, S1 90.233. Base case (probability 55%, bearish bias): I2701 [10-14 settlement] 674.5 sits between P and S1; the 10-14 night session already dipped to 669.5 and closed at 671. If the day session confirms an effective break below S1 672 and the 20-day low 671, the downside target is the 660 round-number zone, roughly 1 ATR below the 20-day low, corresponding to the 655–657.5 target band noted in the first half; operationally, hold the established short scheme, do not chase shorts after the break of 671, and wait for a retest confirmation. Bullish case (probability 20%): trigger is a daily close back above pivot P 679 with a break of R1 684 (about 1 ATR from 674.5), or SGX FEF=F holding firmly above R1 90.983; at that point the short structure fails, the target is the 694 zone, roughly 1 ATR above R1 684, and operationally close shorts and move to neutral, with no reverse positioning. Bearish case (probability 25%): trigger is FEF=F breaking below S1 90.233 and approaching the 52-week low of 90.2, while I2701 closes below 671 on the daily chart; the target is below 660 toward 655, and operationally add to shorts per the established rules but not beyond the risk-budget cap. The three scenarios sum to 100%, and the base case is consistent with the bearish directional conclusion.
VIII. Trading Strategies & Risk Management
Trading strategies quote the established plan verbatim: short entry 676, stop-loss 687, target 655, horizon 1–2 weeks, risk/reward 1:1.9; short entry 674, stop-loss 685, target 657.5, horizon 1–5 days, risk/reward 1:1.5. Stop-losses are placed above pivot P 679 and R1 684: on a risk-conversion basis, both schemes have a stop distance of 11 points, i.e. 1.04×ATR (ATR14 10.536), which exactly covers the dense pull zone from P to R1; if the daily close reclaims P 679 and breaks R1 684, the invalidation condition described in the first half is triggered, and the stop-loss avoids being passively held through a structural reversal. Position sizing and add/trim rules: contract multiplier 100, risk per lot CNY 1,210 (including fees and slippage), single-trade risk budget CNY 66,928, corresponding to a reference cap of 55 lots, shared by both schemes; add only after an effective break below S1 672 and the 20-day low 671, with total lots not exceeding 55; trim on a retest near P 679 or on reaching the first target. The 1–2 week scheme corresponds to the event window (10-19 China data, 10-20 LPR), while the 1–5 day scheme focuses on short-term volatility; risk/reward ratios of 1:1.5 and 1:1.9 are both below 2:1, so stop-losses must be strictly enforced.
IX. This Week's Data Calendar
This week's data calendar (Beijing time): 10-15 20:30 US core PPI m/m (consensus 0.3%, prior 0.2%), core retail sales m/m (consensus 0.6%, prior 1.4%), PPI m/m (consensus 0.6%, prior 0.4%), retail sales m/m (consensus 0.3%, prior 1.2%); 10-16 11:30 Fed Chair Warsh speaks; 10-19 09:30 new home prices m/m, 10:00 fixed-asset investment ytd/y, industrial value-added y/y, retail sales y/y, real estate investment ytd/y, GDP-related data and capacity utilization, etc.; 10-20 09:15 1-year LPR (prior 3%), 5-year LPR (prior 3.5%), 09:30 GDP y/y. These events transmit to the black complex via the US dollar and China demand expectations; focus on the 10-19 and 10-20 releases.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.