News and macro front jointly drove iron ore prices significantly higher [SMM Commentary]

Today, DCE iron ore futures held up well, with the most-traded contract I2509 closing at 737, up 2.43% for the day. Traders were active in selling, while steel mills purchased as needed. The market transaction atmosphere was average. In Shandong, the mainstream transaction prices of PB fines were around 770-780 yuan/mt, up 10-15 yuan/mt from yesterday. In Tangshan, the transaction prices of PB fines were around 785-790 yuan/mt, also up 10-15 yuan/mt from yesterday. According to the SMM survey, on May 14, the operating rate of blast furnaces at 242 steel mills surveyed by SMM was 88.63%, down 0.33 percentage point MoM. The daily average pig iron production of the sampled steel mills was 2.4403 million mt, down 17,600 mt MoM. Despite expectations of a decline in iron ore demand, the US's seasonally unadjusted CPI for April, released last night, rose 2.3% YoY, below market expectations. Market expectations for RRR cuts and interest rate cuts have increased. Coupled with the impact of the loading and unloading equipment accident at a Peruvian port, market speculation sentiment is high, and ore prices are expected to continue to hold up well in the short term.

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