Steel mills in Shanxi begin to implement flat control; iron ore prices move downwards after a higher opening [SMM Brief Comment]

Today, the DCE iron ore futures market opened higher and moved downwards after a higher opening, with the most-traded contract I2509 closing at 715.5, up 0.21% for the day. Traders sold goods according to market conditions. At the beginning of the week, steel mills had a strong wait-and-see sentiment, with some purchasing as needed. The market transaction atmosphere was average. The mainstream transaction prices of PB fines in Shandong were around 705-708 yuan/mt, basically flat compared to last Friday; the transaction prices of PB fines in Tangshan were around 720-725 yuan/mt, also basically flat compared to last Friday.

Last week, the total global iron ore shipment volume reported by SMM was 37.0661 million mt, an increase of 2.361 million mt WoW; the total iron ore arrival volume in China reported by SMM was 27.1604 million mt, an increase of 623,100 mt WoW. The supply increase this week was significant, putting certain pressure on ore prices. In addition, it was reported in the morning that the production control policy in Shanxi had been confirmed, and some steel mills would start implementing production cuts tomorrow, causing market sentiment to pull back and dragging ore prices weaker. Considering that the actual impact in the short term is limited, ore prices will still continue to hold up well.

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