DCE iron ore futures trended weaker today, with the I2609 contract closing at 734 yuan/mt, down 1.74% from the previous trading day. Port spot prices fell by 3–8 yuan/mt compared to the previous trading day. Trader activity was moderate, and steel mill purchases were mostly for restocking. As of now, spot trading volume was moderate. According to an SMM survey, total iron ore inventory across 35 main ports nationwide stood at 148.3 million mt this week, down 360,000 mt WoW, indicating a slight overall destocking. Over the same period, the daily average port pick-up volume edged up 68,000 mt to 3.298 million mt, reflecting relatively healthy short-term demand. Next week, port arrivals are expected to continue increasing, leading to a more ample supply, while port pick-up volume may pull back as hot metal production gradually declines. Iron ore price support has weakened, but short-term prices are likely to fluctuate within a range amid supply-demand conditions in line with market expectations. [SMM Steel]

Iron ore prices followed an initial rise and subsequent decline this week, with the price center shifting further lower. The core drivers were that after the ninth round of coke price cuts was implemented, steel mill losses widened further. Combined with expectations of environmental protection-driven production restrictions in some regions, blast furnace maintenance plans increased, hot metal production continued to pull back, and the demand side was clearly under pressure. In terms of supply, global iron ore shipments and China’s port arrivals both increased MoM, with supply-side pressure intensifying somewhat and further weighing on ore prices. During the week, market talk that benchmark negotiations might restrict low-grade ore port cargo pick-up pushed futures to a short-term rebound. However, the market broadly viewed the probability of this measure actually being implemented as low, and after sentiment was released, price logic returned to a demand-led mode. Affected by this, spot prices performed weaker than futures. In port spot cargoes, the weekly average of the MMI 61% index slipped 5 yuan/mt MoM. Chart: MMI 61% Port Spot Index Source: SMM The domestic iron ore concentrate market edged lower this week, with regional divergence in performance. Prices remained basically stable in Tangshan, Qian’an, and Qianxi in Hebei. Areas such as Chaoyang, Beipiao, and Jianping in western Liaoning edged down by 5-10 yuan/mt. East China saw a pullback of 10-15 yuan/mt. Overall domestic ore production remained steady, but the resource landscape diverged by region. Supply in Hebei remained somewhat tight; within this, the Chengde area saw a further contraction in resource supply due to a mining accident, which provided some support to local iron ore concentrate prices. On the demand side, hot metal production at steel mill blast furnaces remained at a high level, still offering support to iron ore concentrate demand. However, steel mill profits have narrowed significantly recently, and the overall desire to bargain down prices is strong, causing local iron ore concentrate prices to edge down slightly. Chart: Tight Domestic Ore Supply Supports Prices — Domestic vs. Imported Ore Price Spread to Widen Further Next Week Outlook for Next Week Looking ahead to next week, the probability of the 10th round of coke price increases being implemented is relatively high. Increasing steel mill maintenance resulting from losses will lead to a larger decline in hot metal production. Iron ore demand will continue to deteriorate. Meanwhile, mines will push shipments in June, and imported ore port arrivals still have upside room over the next two weeks, leading to a slight accumulation in port inventories. In addition, a new round of talks between the US and Iran is scheduled for mid-month, and crude oil prices still face downside expectations, so iron ore shipping costs will remain weak. Iron ore prices will remain under pressure. However, considering the disturbance from benchmark negotiation news, there may be opportunities for a price rebound. Overall, iron ore prices are expected to remain in the doldrums next week. Domestically, the tight iron ore supply situation is expected to be difficult to alleviate. But given that demand for iron ore concentrates has weakened somewhat, steel mills’ push for lower prices will continue to dominate. The game between sellers and buyers continues. Overall, the domestic iron ore market is expected to be in the doldrums next week, but the decline may be smaller than that for imported ore.

[7.3 Morning Meeting Minutes] US June ADP employment increased by 98,000, the smallest gain since March and below market expectations of 118,000. The most-traded SHFE nickel 2609 contract moved sideways in morning trading, closing the session at 125,880 yuan/mt, down 0.41%. A stronger US dollar and a shift in market expectations toward a more "hawkish" US Fed policy stance kept the macro environment challenging. Markets turned their attention to this week's US ADP and non-farm payrolls data. In the short term, nickel prices are expected to trade in the doldrums within the range of 125,000-135,000 yuan/mt.

Iron ore prices in Tangshan remain stable, with 66% grade iron ore concentrates at dry basis tax-inclusive EXW prices of 970-980 yuan/mt. Local resources are extremely tight, mines and beneficiation plants hold strong willingness to keep prices firm, and their pricing power has strengthened. Demand side, local steel mills may gradually make maintenance plans recently, with overall hot metal production expected to decline, weakening demand support for iron ore concentrates. Overall, steel mills’ desire to bargain down prices remains strong, but mines and beneficiation plants will not sell below their psychological expectations. Sellers and buyers are locked in a standoff. Overall, local iron ore concentrate prices are expected to remain largely stable. [SMM Steel]

The DCE iron ore futures weakened after surging during the night session today, with contract I2609 closing at 740 yuan/mt, up 0.48% from the previous trading day. Port spot prices rose by 5-8 yuan/mt from the previous trading day. Trader activity was moderate, steel mills purchased as needed, and spot trading volume has been average so far. Fundamentals of iron ore supply and demand remain stable, with supply on the loose side, and are expected to be steady as the pace of mine shipments slows. On the demand side, as the Southeast Asian export market enters the steel off-season, regional traders have begun to proactively cut prices to compete, causing China's export demand to weaken. However, there is still buffer room in domestic steel inventory, which is unlikely to trigger steel mills' willingness to cut production in the short term. On the news front, aside from rumors of supply tightening for specific products, there were no events determining the market trend. Therefore, considering all factors, short-term iron ore prices are likely to fluctuate within a range. [SMM Steel]

The DCE iron ore futures consolidated today, with contract I2609 closing at 733 yuan/mt, down 1.68% from the previous trading session. Port spot prices fell 10-12 yuan/mt from the previous trading day. Trader activity was moderate, while steel mill inquiries increased. Spot trading volume was moderate as of now. Demand for iron ore was expected to trend lower in July. On one hand, the steel market was impacted by the off-season, with reductions in both domestic demand and exports and prices trending downward. Meanwhile, the ninth round of coke price increases was implemented, expectations for a tenth round were strong, and steel mill profits remained under pressure, fueling expectations for production cuts. According to SMM's survey this week, sample steel mill production was 2.456 million mt, down 4,700 mt WoW, and some enterprises had started arranging maintenance plans, with hot metal output expected to decline further. Overall, short-term ore prices were expected to be bearish. [SMM Steel]