Production Restrictions Increased at Tangshan Steel Mills, Short-Term Iron Ore Prices Under Pressure [SMM Brief]

DCE iron ore futures held up well today, with the most-traded contract I2601 closing at 787.5 yuan/mt, up 0.77% from yesterday. Traders showed moderate willingness to sell, while steel mills' wait-and-see sentiment intensified, leading to a decline in the transaction sentiment index. Market activity remained sluggish. In Shandong, mainstream transaction prices for PB fines were at 775-778 yuan/mt, down 2-5 yuan/mt from yesterday. In Tangshan, PB fines traded around 790-795 yuan/mt, flat from the previous day.

This week's SMM port inventory data showed continued inventory declines as the drop in port arrivals outpaced the decrease in port pick-up volume. Additionally, some Tangshan steel mills received production restriction notices today, requiring concentrated shutdowns from tonight until the 3rd. However, given that production will quickly resume from next Thursday, the overall impact is limited. Coupled with currently positive macro sentiment, ore prices are expected to dip first then rise next week.