Short-term supply contraction supports iron ore prices to continue rising [SMM Commentary]

Today, Dalian iron ore futures continued to rally, with the most-traded contract I2509 reaching a high of 769.5 and closing at 766.5, up 0.26% for the day. Traders sold their goods according to market conditions. Steel mills adopted a cautious wait-and-see attitude, mostly conducting tenders for procurement on an as-needed basis. The market transaction sentiment was generally moderate. In the Shandong region, the mainstream transaction prices of PB fines were around 748-750 yuan/mt, holding steady compared to last Friday's prices. In the Tangshan region, the transaction price of PB fines was around 765 yuan/mt, also holding steady compared to last Friday's prices. SMM shipping data showed that the total global iron ore shipments last week were 30.55 million mt, down 1.97 million mt MoM (a 6% decline), and China's iron ore port arrivals were 24.69 million mt, down 1.62 million mt MoM (a 6% decline), indicating a continued downward trend in short-term supply. However, the General Administration of Customs announced today that June's imports reached a new high for the year, with the YoY decline narrowing slightly. The overall shipment volume in Q2 increased YoY, suggesting that medium and long-term supply pressures still exist. Currently, the market sentiment in the short term is relatively optimistic, and iron ore prices may continue to hold up well, but further upside room may be limited due to increased resistance above.

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