Decline in pig iron production narrows & China-U.S. talks conclude, imported ore prices hold up well [SMM Commentary]

Today, DCE iron ore futures held up well, with the most-traded contract I2509 closing at 707, up 1% for the day. Traders were enthusiastic about selling, while steel mills adopted a wait-and-see attitude, with most conducting tenders as usual. The market transaction sentiment was moderate. In Shandong, the mainstream transaction prices of PB fines were around 725-730 yuan/mt, rising slightly by 5-10 yuan/mt from yesterday's prices. In Tangshan, the transaction prices of PB fines were around 740-745 yuan/mt, also rising slightly by 5-10 yuan/mt from yesterday's prices.

Optimistic signals emerged from the China-US-London negotiations, boosting market sentiment and driving futures prices to rise amid fluctuations. SMM data showed that the decline in pig iron production narrowed this week, and the blast furnace operating rate remained resilient. In the short term, the high daily average pig iron output supported ore prices. However, as south China entered the plum rain season, steel demand weakened seasonally. Coupled with expectations of a policy to control crude steel output, the upside room for ore prices was limited. The short-term trend is expected to maintain a fluctuating pattern. Close attention should be paid to tomorrow's apparent demand and inventory data for the five major steel products. If demand falls short of expectations, ore prices may come under pressure and pull back.

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