Long positions take profit and exit, iron ore prices pull back slightly in the afternoon [SMM Brief Comment]

Today, iron ore futures continued to rise in the morning but pulled back slightly in the afternoon. The most-traded contract I2601 closed at 802.5 yuan, up 0.38% from the previous trading day. Spot cargoes at ports were basically flat compared to the previous trading day, with PB fines in Shandong transacted at 800-805 yuan, basically unchanged from yesterday's price; PB fines in Hebei traded at 810-815 yuan/mt, up 0-5 yuan/mt from yesterday. Market trading activity was moderate today, with traders mostly selling at market prices. Steel mills purchased as needed, with limited inquiries.
The meeting between the Chinese and US heads of state boosted market sentiment, driving futures higher in the morning session. However, in the afternoon, with no further confirmation of news, some bulls chose to take profits, leading to a slight pullback in prices. Overall, as details of the meeting are gradually released, macro expectations remain relatively optimistic, providing some support for iron ore prices. However, recent sustained increases in raw material prices have significantly squeezed steel mill profits, with some mills seeing expanded losses, raising the possibility of passive production cuts in the near term, which could constrain upside room for ore prices. Overall, iron ore prices are expected to hold up well in the short term, but the pace of gains is likely to narrow gradually.