Iron ore rose 9.5% in intraday trading. Operation was suspended due to FMG Pilbara mine accident.

On September 30th, the main iron ore closed up 5.41%, and the intraday increase was as high as 9.5%, mainly due to news that a major accident occurred in the Solomon Hub of the FMG Pilbara mine, and it was rumored that a maintenance worker had died due to a fall. The operation of the site was suspended. Elizabeth Gaines, chief executive of FMG, says the safety and well-being of workers is her top priority. Solomon Hub is located 60 kilometers north of Tom Price in Western Australia and includes the Firetail, Kings Valley and Queens Valley iron mines. According to FMG official data, the annual production capacity of the three iron ore sites is about 75 million tons., Solomon Hub's main products are FMG mixed powder (: blending higher iron grade, low cost Firetail ore with low phosphorous Chichester ore to create Fortescue Blend)).

According to SMM's understanding, affected by the accident, the mine will suspend production, which will be good for iron ore prices in the short term; FMG's annual target this year is about 1.78-182 million tons. In the long run, the impact on the overall production of FMG is limited if the mining area is shut down for a short time.

Crazy iron ore futures prices quickly entered the frozen state after refreshing the all-time high on May 12 this year, halving to a 16-month low of 606 yuan / ton. The main reason is that the state has cracked down on iron ore hoarders and futures speculators to curb their rampant growth. In addition, under the dual-carbon target, domestic restrictions on steel production have accelerated the decline in iron ore prices. China's crude steel output increased by 11.8% in the first half of this year compared with the same period last year. Domestic crude steel production has declined continuously since May, with crude steel production falling 8.42 per cent in July from a year earlier and 13.2 per cent to 83.24 million tons in August, the lowest since February, according to the National Bureau of Statistics.

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At the same time, domestic iron ore production has increased, iron ore imports also showed a downward trend. According to the data of the National Bureau of Statistics, the domestic original mineral output in August was 83.915 million tons, an increase of 5.6 percent over the same period last year. The cumulative output from January to August was 658.362 million tons, an increase of 14.2 percent over the same period last year. Iron ore imports in August were 97.49 million tons, down 2.9 per cent from a year earlier. From January to August, imports totaled 747.39 million tons, down 1.7 percent from the same period last year. In September, stainless steel plants were also affected by limited electricity production. Stainless steel factories in Guangxi, Jiangsu, Guangdong and Shandong were notified of production restrictions, and the output of stainless steel decreased greatly compared with August; high-carbon ferrochromium showed a trend of weak supply and demand, but recently there was a continuous shortage of ferrochromium. Ferrochromium manufacturers still have a certain backlog of early orders, and the confidence of the iron factory is still relatively sufficient.

UBS expects iron ore to "transform" into a supply glut, with prices falling below $100 a tonne in about the same period. It estimates the average price of iron ore next year at about $89 a tonne, down from its previous forecast of $101 a tonne. BHP Billiton, the global mining giant, warned in mid-August that iron ore prices had peaked amid falling steel production in China and the latest global outbreak. In the medium term, China's demand for iron ore is expected to be lower than current levels as crude steel production stagnates and scrap ratios rise.

Since mid-late July, under the continuous fermentation of reduced and limited production nationwide, iron ore prices have continued to decline, and the center of gravity has fallen back to 90-110 US dollars. However, some people in the market believe that most of the imported mine prices have reached the cost line of some overseas non-mainstream mines, and the double control of energy consumption is mostly aimed at electric furnaces, the pressure reduction of blast furnaces has been alleviated, and the replenishment of raw materials before and after the National Day is expected. Especially today, the intraday increase of the main iron ore contract was as high as 9.5%. As for post-holiday expectations, the market has relaxed expectations for production reduction, and the iron ore market is still expected to continue to pick up, but it is still necessary to pay attention to the actual implementation.