Iron Ore Prices Rose to High Levels, Market Sentiment of Fear of High Prices Suppressed Trading [SMM Brief Comment]

Today, Dalian iron ore futures rose, with the most-traded contract I2601 closing at 804.5 yuan, up 1.96% from the previous working day. Main port spot cargo prices increased by 5-10 yuan/mt compared to the previous working day. In Shandong, transaction prices for PB fines were 805-810 yuan, up 5-10 yuan/mt; in Hebei, transaction prices for PB fines were 810 yuan/mt, up 5 yuan/mt from the previous working day. Market transactions were moderate today, with steel mills restocking as needed and traders actively quoting. This week's SMM survey showed that, affected by the environmental protection policy, the number of blast furnace maintenance shutdowns increased, and the daily average hot metal production decline widened to 24,000 mt, indicating weak iron ore demand. The first batch of ore from the Simandou mine is expected to be shipped soon, while port inventory remains at a high level, leading to a gradual intensification of the supply-demand imbalance for iron ore in the short term. Nevertheless, frequent positive factors at the macroeconomic level, smooth progress in China-U.S. negotiations with an upcoming meeting, and the A-share market index hitting a ten-year high have boosted bullish sentiment, driving iron ore futures to rise for three consecutive days. In the short term, iron ore prices are likely to hold up well.