China-U.S. Tariff Talks Yield Better-Than-Expected Results, Iron Ore Prices Surge Significantly [SMM Brief Comment]

Today, DCE iron ore futures surged significantly, with the most-traded contract I2509 closing at 718.5, up 3.16% for the day. Traders showed good enthusiasm for selling, and speculative transactions increased slightly. Steel mills remained cautious and adopted a wait-and-see attitude, purchasing as needed. The market transaction atmosphere was average. The mainstream transaction prices of PB fines in Shandong were around 765-773 yuan/mt, up 15-18 yuan/mt from last Friday. The transaction prices of PB fines in Tangshan were around 780-785 yuan/mt, up 20 yuan/mt from last Friday.

Last week, the total global iron ore shipments reported by SMM were 31.62 million mt, down 740,000 mt WoW, a slight decrease of 2.3%. Among them, Australia's shipments were 17.46 million mt, down slightly by 8.3% WoW. Brazil's shipments were 7.75 million mt, up slightly by 13.2% WoW. Shipments from non-mainstream mines were 6.42 million mt, up slightly by 11.6% WoW. The total iron ore arrivals in China reported by SMM were 26.81 million mt, up 1.51 million mt WoW, an increase of 5.96%. There was a slight YoY increase of 14%. The supply pressure on iron ore was relatively small, and inventory may continue to decline slightly. In addition, the results of today's Sino-US tariff negotiations exceeded expectations, boosting market sentiment and driving ore prices to surge significantly. In the later stage, focus will be on the crude steel production reduction policy and the accumulation of major steel inventories.

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