Steel Mill Demand Declines, Port Pick-Up Volume Falls, Iron Ore Prices Remain Weak [SMM Commentary]

Today, DCE iron ore futures continued to trade in the doldrums, with the most-traded contract I2509 closing at 702, down 0.43% for the day. Traders' willingness to sell was moderate; steel mills' restocking activities for the week were largely completed, and their purchase willingness weakened. The market trading atmosphere was moderate. In the Shandong region, the mainstream transaction prices of PB fines were around 735 yuan/mt, dropping slightly by 2-5 yuan/mt from yesterday's prices. In the Tangshan region, the transaction prices of PB fines were around 750 yuan/mt, also dropping slightly by 0-5 yuan/mt from yesterday's prices. As of May 30, SMM data showed that the total inventory at 35 ports was 136.24 million mt, a decrease of 1.49 million mt WoW. The daily average port pick-up volume of imported ore was 3.117 million mt, down 21,000 mt WoW. Recently, pig iron production of steel mill blast furnaces has declined somewhat, with short-term demand weakening and port pick-up volumes also decreasing slightly. However, due to a decrease in port arrivals, the overall port inventory is showing a destocking trend. Looking ahead to next week, the fundamental support for iron ore itself is expected to continue to weaken, and ore prices are anticipated to remain in a rangebound, weak trend.

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