Crude Steel Production Cuts Continue, Iron Ore Prices Struggle to Rebound [SMM Brief Comment]

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Today, the iron ore futures first strengthened then weakened, fluctuating downward throughout the day. The most-traded contract I2505 closed at 773, with a daily decline of 0.45%. Traders showed low enthusiasm for selling; steel mills purchased as needed; market transaction atmosphere was average. In Shandong, the mainstream transaction prices of PB fines were around 775-778 yuan/mt, an increase of 0-3 yuan/mt from yesterday; in Tangshan, the transaction price of PB fines was around 785 yuan/mt, unchanged from yesterday. Inventories of the five major steel products turned from increasing to decreasing, and downstream demand continued to rebound. This is bullish for ferrous commodities. However, there are ongoing rumors about crude steel production cuts, even specifying several major producing provinces, which put pressure on ore prices, making them struggle to rebound. But the short-term actual impact is limited. Considering that after the end of the short-term meeting-driven environmental protection-driven production restrictions, pig iron production will see a sustained rise, providing strong support for ore prices. It is expected that ore prices may bottom out and rebound in the short term.