Downstream Demand Boosts Confidence, Iron Ore Prices Surge Significantly [SMM Commentary]

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Today, Dalian iron ore futures fluctuated rangebound in the morning and surged significantly in the afternoon. The most-traded I2505 contract finally closed at 837 yuan/mt, up 2.26% for the day. Traders actively sold off their inventories, while some steel mills locked in profits with moderate purchase willingness. In Shandong, the mainstream transaction prices of PB fines were 825-830 yuan/mt, up 10-15 yuan/mt from yesterday; in Tangshan, the transaction prices of PB fines were around 840-845 yuan/mt, also up 10-15 yuan/mt from yesterday. According to today's SMM data, the apparent demand for rebar increased significantly this week, confirming the improvement in downstream demand, boosting market confidence, and driving a sharp rise in ferrous metals series prices. Looking ahead to next week, iron ore shipments are expected to rebound, but pig iron production is likely to drop back slightly, with overall iron ore demand remaining stable with a weak trend. Considering the strong market expectations ahead of the Two Sessions, ore prices may continue to fluctuate upward. However, given the currently high valuation, an upward breakthrough will be challenging, and prices are expected to operate with sideways movement.