Macro and Fundamentals Jointly Suppress Iron Ore Prices, Leading to a Sharp Decline [[SMM Brief Commentary]]

Today, DCE iron ore futures fell sharply, with the most-traded contract I2509 closing at 693.5, down 2.73% for the day. Traders' enthusiasm for selling was moderate; steel mills purchased as needed, and the market transaction atmosphere was fair. The mainstream transaction prices of PB fines in Shandong were around 750-755 yuan/mt, down 5-10 yuan/mt from yesterday's prices; the transaction prices of PB fines in Tangshan were around 765-770 yuan/mt, down 5-10 yuan/mt from yesterday's prices.

Today, iron ore futures prices fell sharply, mainly due to the combined impact of three bearish factors: firstly, the details of the crude steel production reduction policy were further clarified; secondly, the apparent demand for the five major steel products dropped sharply on a WoW basis, triggering market concerns about "negative feedback"; thirdly, the Trump administration sent a tough signal in tariff negotiations with China. However, with pig iron production currently at a high level, the overall demand for iron ore remains good, providing some support for spot prices and leading to a widening of the spread between futures and spot prices. It is expected that iron ore prices will continue to be in the doldrums in the short term.

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