Rumors of Crude Steel Output Reduction in Shandong Suppress Iron Ore Prices, with Decline Exceeding 2% [SMM Commentary]

Today, DCE iron ore futures continued to decline, with the most-traded contract I2509 closing at 706, down 2.21% for the day. Traders' willingness to sell was moderate; steel mills adopted a wait-and-see attitude, with subdued procurement enthusiasm. The market trading atmosphere was average. In the Shandong region, the mainstream transaction prices of PB fines were in the range of 740-745 yuan/mt, down 10-15 yuan/mt from Friday's prices. In the Tangshan region, the transaction prices of PB fines were around 755-760 yuan/mt, also down 10-15 yuan/mt from Friday's prices. Last week, SMM's total global iron ore shipments reached 35.4 million mt, increasing by 1.35 million mt WoW, with the growth rate slightly narrowing. Among them, Brazil saw the largest increase in shipments. SMM's total iron ore arrivals in China reached 25.48 million mt, decreasing by 800,000 mt WoW. The supply of iron ore continued to increase slightly. Today, news regarding the crude steel output reduction policy once again drew market attention. Some steel mills in Shandong have clearly stated that they will implement production reduction plans, a move that has significantly suppressed iron ore prices, leading to a substantial decline during the day. From the perspective of the short-term market situation, with end-use demand remaining sluggish, coupled with the ongoing impact of the crude steel output reduction policy, it is expected that iron ore prices will remain in the doldrums.

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