Supply-Demand Imbalance in Iron Ore Market Intensifies, Prices Remain Weak [SMM Commentary]

Published: May 27, 2025 17:01

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Today, DCE iron ore futures were in the doldrums, with the most-traded contract I2509 closing at 698.5 yuan/mt, down 1.76% for the day. Traders sold goods in line with market conditions; steel mills adopted a wait-and-see attitude and purchased as needed. The market transaction atmosphere was average. The mainstream transaction prices of PB fines in Shandong were in the range of 733-740 yuan/mt, down 5-10 yuan/mt from yesterday's prices. The transaction prices of PB fines in Tangshan were around 745-750 yuan/mt, down 5-10 yuan/mt from yesterday's prices.

Recently, iron ore demand has peaked and pulled back, and is expected to continue to decline in the medium and long term. The supply side has continued to increase slightly. The overall supply-demand imbalance has widened. Meanwhile, the demand across the industry is also weakening. The decline in finished steel prices has also dragged down ore prices. Market sentiment is relatively pessimistic. It is expected that there will be no upward driving force for ore prices in the short term, and they will continue to operate in the doldrums. Considering that pig iron production is at a high level compared to the same period last year, the downward space for ore prices is limited, and they will mainly fluctuate rangebound.

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