Just-in-time procurement by steel mills supports iron ore prices from falling too sharply [SMM Commentary]

Today, DCE iron ore futures weakened and fluctuated rangebound, with the most-traded contract I2509 closing at 695.5, down 0.5% for the day. Traders sold goods according to market conditions, with some traders holding large volumes of spot resources selling at lower prices. Steel mills purchased as needed, and the market transaction sentiment was moderate. The mainstream transaction prices of PB fines in the Shandong region were around 707-710 yuan/mt, down 5-8 yuan/mt from yesterday's prices. In the Tangshan region, the transaction prices of PB fines were around 718-722 yuan/mt, down 5-10 yuan/mt from yesterday's prices. According to the SMM survey, on June 18, the operating rate of blast furnaces at 242 steel mills surveyed by SMM was 87.70%, down 0.45 percentage points MoM. The daily average pig iron production of the sampled steel mills was 2.4084 million mt, down 6,500 mt MoM. Looking ahead to next week, it is expected that the number of blast furnaces resuming production will be higher than the number undergoing maintenance, leading to a slight increase in overall pig iron production. The overall supply-demand pattern of iron ore remains relatively unchanged. Attention should be paid to the apparent demand for major steel products tomorrow and the impact of geopolitical conflicts on market sentiment.

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