Northern Environmental Protection-Driven Production Restrictions Cause Iron Ore Prices to Plummet [SMM Commentary]

Published: Mar 3, 2025 17:11

Save

Today, Dalian iron ore futures extended last week's downward trend. The most-traded I2505 contract closed at 779.5 yuan/mt, down 2.81% for the day. Traders showed moderate willingness to sell, while steel mills purchased as needed, primarily adopting a strategy of frequent small-volume purchases. Market transaction sentiment was average, with transaction prices falling 10-15 yuan/mt WoW. The supply surplus is expected to persist in the future. Ahead of the Two Sessions, coupled with severe smog expected in north China, Tangshan took the lead in issuing production restriction announcements, with some steel mills conducting blast furnace maintenance, potentially leading to further declines in pig iron production. Under the dual pressure of increasing supply and weakening demand, iron ore prices saw significant declines. Considering the production restriction policy backdrop, market expectations for the introduction of policies exceeding expectations during the Two Sessions remain weak. In the short term, ore prices are unlikely to see significant rebounds and are expected to continue fluctuating downward.

》View SMM Steel Product Prices, Data, and Market Analysis

》Subscribe to Access SMM Historical Spot Metal Prices

Today, DCE iron ore futures extended last week's decline. The most-traded I2505 contract closed at 779.5 yuan/mt, down 2.81% for the day. Traders showed moderate willingness to sell; steel mills purchased as needed, mainly adopting a high-frequency, low-volume purchasing strategy; the market transaction atmosphere was average. In Shandong, the mainstream transaction prices of PB fines were 780-790 yuan/mt, down 10-15 yuan/mt from last Friday; in Tangshan, PB fines transaction prices were around 795-800 yuan/mt, also down 10-15 yuan/mt from last Friday. According to SMM shipping data, last week, iron ore shipments from Australia and Brazil rebounded significantly to a yearly high, with global shipments up 37.7% WoW. Despite a port arrivals decline of 11%, the future supply remains ample. Ahead of the Two Sessions, coupled with severe smog expected in north China, Tangshan took the lead in issuing production restriction notices, with some steel mills conducting blast furnace maintenance, potentially further reducing pig iron production. Under the dual pressure of increased supply and weakened demand, iron ore prices saw a significant decline. Considering the production restriction policy backdrop, the market holds weak expectations for any surprising policies during the Two Sessions, and short-term ore prices are expected to continue fluctuating downward without significant rebound opportunities.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

Mar 20, 2026 18:34

SiMn Exports Pulled Back MoM in February, While Imports Remained at Zero [SMM Analysis]

According to the latest release from the General Administration of Customs, SMM statistics showed that China’s SiMn exports were 1,965.37 mt in February 2026, down 22.61% MoM. Cumulative exports in January-February totaled 4,500 mt, up 11.73% YoY. China’s SiMn imports were 0 mt in February 2026, flat MoM from January. Cumulative imports in January-February were 0 mt, down 100% YoY. By regional import and export structure, SiMn exports were mainly destined for Indonesia.

Mar 20, 2026 18:34

Mar 20, 2026 18:32

Off-Season Demand Coupled With the Chinese New Year Effect Led to a Significant Decline in China's SiMn Exports in January [SMM Analysis]

According to the latest release from the General Administration of Customs, SMM statistics showed that China’s SiMn exports were 2,539.52 mt in January 2026, down 50.55% MoM and down 31.84% YoY. China’s SiMn imports were 0 mt in January 2026, down 100% MoM and down 100% YoY. By import and export regional structure, SiMn exports were mainly destined for Indonesia.

Mar 20, 2026 18:32

Mar 20, 2026 18:30

Ferrous Metals Expected to Continue Holding Up Well Amid the Middle East Conflict and Long-Term Contract Negotiations [SMM Steel Industry Chain Weekly Report]

This week, ferrous metals fluctuated at highs, with raw material ore and coking products outperforming steel. Against the backdrop of the escalating conflict in the Middle East, ore and coking products held up well, supported by higher shipping costs and transmission from coal and coke as energy substitutes. In the second half of the week, supply and demand data for hot-rolled coil and rebar were released. The increase in rebar inventory slowed markedly; however, hot-rolled coil demand was lower than the same period last year, and the pace of post-holiday recovery was relatively slow, leaving steel as a whole with limited upward momentum, while futures retreated after rapid rise. In the spot market, trading in the Chinese market was average this week.....

Mar 20, 2026 18:30