Short-Term Market Sentiment Eases, Iron Ore Prices Retreat from Highs [SMM Brief Commentary]

Today, the most-traded iron ore futures contract fell significantly, trading in the doldrums throughout the day. The most-traded contract I2601 finally closed at 782 yuan, down 2.07% from the previous day. Traders' willingness to sell was moderate; some steel mills made purchases at lower levels. The overall market transaction atmosphere was moderate. In Shandong, the mainstream transaction prices for old PB fines were around 778 yuan/mt, down 17-18 yuan/mt from the previous day; in Tangshan, transaction prices for PB fines were 785-790 yuan/mt, down 15-17 yuan/mt from the previous day.

The impact of the removal of special vessel port dues has limited actual effect on iron ore freight rates. Yesterday's concerns eased, and iron ore prices retreated from highs. In the short term, iron ore demand is expected to weaken. Market worries about negative feedback have intensified, capping the upside for ore prices. However, according to SMM's blast furnace maintenance survey results, the decline in hot metal production is relatively small in the short term, iron ore demand remains high, and the downside for ore prices is relatively limited.