News of Crude Steel Production Cuts Weighs on Iron Ore Prices, Causing Them to Fluctuate Downward [SMM Commentary]

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Today, Dalian iron ore futures saw a significant decline in the morning but partially recovered in the afternoon. The most-traded I2505 contract finally closed at 812, down 0.98% for the day. Traders showed moderate enthusiasm for selling; steel mills made small and frequent purchases; overall market transaction sentiment was average. In Shandong, mainstream transaction prices for PB fines were 805-810 yuan/mt, down 0-5 yuan/mt from yesterday; in Tangshan, PB fines transaction prices were around 820 yuan/mt, down 5 yuan/mt from yesterday's high. Today, the market once again circulated a "rumor" regarding crude steel production cuts. According to the information, crude steel production is expected to be reduced by 50 million mt in 2025, 20 million mt in 2026, and 10 million mt in 2027. This news provided a bullish impact on finished steel prices but was bearish for iron ore prices, leading to a sharp decline in iron ore futures prices. However, as market sentiment gradually calmed, futures prices partially recovered. From a fundamental perspective, today's SMM pig iron production slightly decreased by 5,500 mt, and it is expected to continue declining next week, weakening support for ore prices. Coupled with the earlier sentiment-driven impact, it is comprehensively judged that iron ore prices are likely to continue fluctuating downward tomorrow.