Environmental Protection-Driven Production Restrictions Hit, Demand Weakens, Iron Ore Prices Fall Under Pressure [SMM Brief Comment]

Today, the most-traded iron ore futures contract traded in the doldrums, with the most-traded contract I2605 closing at 753 yuan, down 0.92% from the previous trading day. Traders sold at market prices; steel mills purchased as needed, with moderate inquiry volume. Market transaction sentiment was average. In Shandong, the transaction price for PB fines was 770-775 yuan, down 5-10 yuan/mt WoW; in Hebei, the transaction price for PB fines was 785-790 yuan/mt, down 5-10 yuan/mt WoW.

According to SMM shipping data last week, global iron ore shipments totaled 35.87 million mt, up 2.57 million mt WoW, an increase of 7.7%. SMM China iron ore arrivals totaled 26.88 million mt, down 340,000 mt WoW, a slight decrease of 1.2%. Supply declined slightly, but the impact was limited. However, a new round of environmental protection-driven production restrictions hit northern regions, currently mainly targeting sintering machine restrictions, with some areas having steel mills conduct overhauls in coordination with environmental protection-driven production restrictions, or required to shut down furnaces. Affected by this, short-term iron ore demand is still declining, suppressing ore prices.