Pig iron production is expected to decline, with iron ore prices opening high and then falling [[SMM Commentary]]

Today, the DCE iron ore futures opened higher and moved downwards after a higher opening, holding up well throughout the day. The most-traded contract I2509 eventually closed at 714.5, up 1.06% for the day. Traders sold goods according to market conditions, while steel mills purchased as needed. Trading volume in the market decreased compared to yesterday. The mainstream transaction prices of PB fines in the Shandong region were around 765-770 yuan/mt, down 3-5 yuan/mt from yesterday's highs. In the Tangshan region, the transaction prices of PB fines were around 770-775 yuan/mt, down 5-10 yuan/mt from yesterday's prices. According to SMM's weekly blast furnace maintenance statistics, the impact from blast furnace maintenance on pig iron production this week was 900,900 mt, an increase of 80,700 mt WoW. It is estimated that the daily average pig iron production may decrease by around 10,000 mt this week. Additionally, based on the blast furnace maintenance plans of steel mills, the impact from blast furnace maintenance is expected to increase next week, with a trend towards greater reductions in pig iron production, which is bearish for ore prices. However, considering the easing of market sentiment due to tariff impacts, the market may continue to hold up well in the short term, but with limited upside potential.

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