Rising Expectations for US Fed, Iron Ore Prices Continue to Climb [SMM Brief Review]

Today, iron ore futures continued to surge, with the most-traded contract I2601 reaching a high of 803.5 and finally closing at 801, up 1.14% slightly from the previous trading day. Traders showed high enthusiasm for selling; steel mills adopted a cautious wait-and-see approach, with general purchase willingness. Market transaction atmosphere was moderate. In Shandong, transaction prices for PB fines were in the range of 795-800 yuan, up 2-5 yuan/mt WoW from last Friday's transaction prices; in Hebei, transaction prices for PB fines were 802-808 yuan/mt, up 2-5 yuan/mt WoW from last Friday.

Last week, SMM global iron ore shipments totaled 33.29 million mt, down 7.8% WoW. However, SMM China iron ore arrivals reached 27.22 million mt, up 6.6% WoW. Iron ore supply continues to increase, and there is still room for growth in the medium and long-term, with fundamentals remaining weak. However, in the short term, expectations for a US Fed interest rate cut have significantly heated up. Coupled with a round of decline in coke prices, steel mill profits have expanded. Market sentiment is relatively optimistic, driving iron ore prices to continue climbing to high levels. Considering the increase in blast furnace maintenance at steel mills and the overall decline in iron ore demand, the upside for iron ore prices is limited.