Iron ore futures plunged today, with the most-traded contract I2601 closing at 766 yuan, down 2.67% from the previous trading day. Traders’ willingness to sell weakened, while steel mills’ wait-and-see sentiment intensified, with purchase willingness remaining moderate at the start of the week. Market transactions were sluggish. In Shandong, mainstream transaction prices for PB fines stood at 760-765 yuan/mt, down 10-15 yuan/mt WoW. In Tangshan, PB fines traded around 770-775 yuan/mt, down 15-20 yuan/ mt WoW. As the 93rd military parade approaches, blast furnace maintenance at steel mills in Tangshan, Hebei has increased again. Meanwhile, Henan also introduced production restrictions, with most mills limiting sintering output by 30-50% and some blast furnaces undergoing 3-5 days of shutdowns. This led to an expanded decline in hot metal production this week, significantly weakening iron ore demand. Coupled with market rumors about potential crude steel output reduction policies in September, overall sentiment remained pessimistic. However, considering the expected recovery in hot metal production over the weekend, overall iron ore demand is likely to remain high. Although supply growth is anticipated, short-term inventory drawdowns continue, with limited supply-demand imbalance. Iron ore prices are expected to rebound after short -term corrections.

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Source: Metals Market Index (MMI)