Downstream Demand Gradually Recovers with Slight Increase in Pig Iron; Iron Ore Prices Remain Strong [SMM Commentary]

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Today, DCE iron ore fluctuated upward. The most-traded I2505 contract finally closed at 820.5 yuan/mt, up 1.48% throughout the day. Traders sold goods based on market trends, while steel mills purchased as needed. The market transaction atmosphere was average. In Shandong, the mainstream transaction prices of PB fines were 815-818 yuan/mt, up 10 yuan/mt from yesterday. In Tangshan, the transaction prices of PB fines were around 830-835 yuan/mt, up 5-10 yuan/mt from yesterday. According to the SMM survey, as of February 19, the operating rate of blast furnaces in 242 steel mills surveyed by SMM was 86.29%, up 0.45 percentage points WoW. The daily pig iron production of the sample steel mills was 2.375 million mt, up 9,700 mt WoW. With downstream demand gradually recovering, the finished steel market transactions improved, and previously overhauled blast furnaces resumed production as planned, driving a slight increase in pig iron production, which in turn pushed iron ore prices further upward.