Global Trade War Escalates, Iron Ore Prices Fluctuate Downward [SMM Commentary]

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Today, DCE iron ore fluctuated downward, with a sharp drop at the close. The most-traded I2505 contract finally settled at 808 yuan/mt, down 1.52% for the day. Traders showed reduced enthusiasm for selling, while steel mills purchased as needed. Market activity was moderate, with average transactions. In Shandong, mainstream transaction prices for PB fines were at 800-805 yuan/mt, down 10-15 yuan/mt from yesterday. In Tangshan, transaction prices for PB fines were around 815-820 yuan/mt, also down 10-15 yuan/mt from yesterday.

Today, India's Steel Minister announced that India might impose a provisional tax of 15% to 25% on Chinese steel within six months at the earliest. This heightened market concerns over a global trade war's impact on steel exports, leading to a decline in prices across various ferrous products. Considering that short-term fundamentals in the industry show a relatively small imbalance, the negative feedback mechanism remains weak. Coupled with supply-side disruptions, downward pressure on ore prices in the short term is significant, and prices may hover at highs in the near term.