Weekly Review
This week, imported iron ore prices fluctuated and declined. The primary reason for the pullback from highs was the weakening of fundamental support: SMM shipping data showed that global iron ore shipments rebounded 8.7% WoW, port arrivals increased slightly by 5.8%, while daily pig iron production dropped slightly by 5,500 mt, with increased supply and reduced demand putting pressure on ore prices. Additionally, macro-level disturbances increased, particularly rumors about "a 50 million mt crude steel reduction by 2025," which intensified market pessimism. However, downstream demand continued to recover, with apparent demand for the five major steel products steadily rebounding, providing some support for iron ore prices. Regarding port prices, PB fines in Shandong fell by 5-10 yuan/mt WoW.
Chart: SMM 62% Imported Ore MMi Index
Data Source: SMM
This week, domestic ore prices showed mixed performance. Domestic ore prices are expected to remain stable with a weak trend next week.This week, prices in Tangshan, Qian'an, and Qianxi in Hebei fell by 5-10 yuan, while prices in west Liaoning, Chaoyang, Beipiao, and Jianping increased by 10-15 yuan/mt. Prices in east China rose by 1-5 yuan.
Tangshan MarketTrading of domestic iron ore concentrates was sluggish, with local leading steel mills showing a strong desire to bargain down prices. The delivery-to-factory price for 66% grade dry basis iron ore concentrates, including tax, was 960-970 yuan/mt. Local operating rates remained low, and with the Two Sessions approaching, no restrictions on explosives were reported. Mines and beneficiation plants were mostly operating normally, but overall sentiment was cautious, and willingness to sell below psychological expectations was weak. Local steel mills were operating at break-even levels, with domestic ore demand mainly based on purchasing as needed.
West Liaoning MarketDomestic iron ore concentrate pricesinchedupward. The current ex-factory price for 66% grade wet basis iron ore concentrates, excluding tax, was 730-735 yuan/mt. Operating rates in Beipiao and Chaoyang remained low, and high-grade resources were still priced firmly. Some beneficiation plants with spot inventory showed little willingness to sell at low prices. Recently, some producers in the Tangshan area have been purchasing iron ore concentrates in Chaoyang, but overall resources in the region remained tight, and sentiment among mines and beneficiation plants was cautious. With the Two Sessions approaching, local mines and beneficiation plants may temporarily halt production in the short term.
East China RegionThe domestic iron ore concentrate market mainly operated normally, with production and sales aligned, and no significant inventory pressure. In some areas, mining and beneficiation activities affected by previous mining accidents may resume normal production after the Two Sessions. Overall, the supply of iron ore concentrates in the region remained tight.
Outlook for Next Week
For imported ore:With the Two Sessions imminent, the market still holds expectations for stimulus policies. However, considering the current economic and political conditions, the likelihood of introducing policies exceeding expectations is low, and the meeting results may fall short of market expectations. From a fundamental perspective, there is still significant room for increased shipments from Australia and Brazil, but port arrivals may decline significantly due to earlier shipment reductions. On the demand side, according to SMM's blast furnace maintenance schedule, daily pig iron production is expected to drop slightly again next week, keeping short-term supply relatively loose. Overall, after the Two Sessions, market sentiment may weaken, and price logic will return to fundamentals. SMM expects ore prices to show a high-to-low trend next week, with the price center likely to shift downward.
For domestic ore:Overall,the tight supply trend for domestic iron ore concentrates is evident, providing some support for prices. On the demand side, pig iron production from steel mills' blast furnaces may show a downward trend in the short term, weakening support. Considering the upcoming important meeting next week, if policy measures fall short of expectations, market sentiment may turn bearish. Domestic iron ore concentrate prices are expected to remain stable with a weak trend next week.
》Click to View the SMM Metal Industry Chain Database
