Market Sentiment Weakens, Iron Ore Prices Drop to a New Low Since March [SMM Commentary]

Today, iron ore futures continued their weak downward trend. The most-traded I2505 contract fell to a new low for March, closing at 760, with a daily decline of 2.12%. Traders showed low enthusiasm for selling; steel mills purchased as needed; and market transactions were sluggish. In Shandong, the mainstream transaction prices of PB fines were around 760-765 yuan/mt, down by 10-15 yuan/mt from yesterday. In Tangshan, the transaction prices of PB fines were around 770 yuan/mt, down by 15 yuan/mt from yesterday. According to an SMM survey, as of March 19, the operating rate of blast furnaces at 242 steel mills surveyed by SMM was 87.25%, up 0.64 percentage points WoW. The daily average pig iron production of the sample steel mills was 2.3909 million mt, up 19,000 mt WoW. During this period, three blast furnaces underwent new maintenance, while four resumed production. Part of the increase came from a blast furnace that resumed production on the 12th. Additionally, SMM predicts that pig iron production is expected to increase further in the coming weeks, providing some support for ore prices. However, due to the impact of the trade war and weak confidence in end-use demand, market sentiment remained pessimistic, and iron ore prices continued to face downward pressure. Attention should be paid to the apparent demand and inventory levels of the five major steel products tomorrow.

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