Iron ore prices weaken, spread between futures and spot prices narrows [SMM Brief Comment]

Today, DCE iron ore futures opened with a slight drop, with the most-traded contract I2509 eventually closing at 703, down 0.42% for the day. Traders sold goods in line with market conditions. Steel mills had a strong desire to bargain down prices, with transactions mainly concluded at lower prices. The market trading atmosphere was average. The mainstream transaction prices of PB fines in the Shandong region were around 702-705 yuan/mt, down 5-8 yuan/mt from yesterday's prices; the transaction prices of PB fines in the Tangshan region were around 710-715 yuan/mt, down 5-8 yuan/mt from yesterday's prices.

Today, affected by the Middle East conflict, iron ore prices were in the doldrums. However, due to relatively small industry contradictions and fundamental support, the decline in futures prices was limited. Currently, there is an abundant supply of spot resources in the market, and the selling of some varieties at lower prices has led to the spread between futures and spot prices narrowing to parity. Considering the slight increase in pig iron production this week, it is expected that spot demand will remain high, providing support for ore prices, with limited downward space in the short term.

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