en.Wedoany.com Reported - Recently, China's imported iron ore spot market has shown a volatile trend, with futures prices rising slightly before pulling back. Last week, the main iron ore futures contract hit a high of 753 yuan/ton, while the mainstream transaction price of PB fines in the Tangshan area remained at 710 yuan/ton, with the overall basis exhibiting a flat volatility pattern.
On the supply side, overseas mines have entered a seasonal decline in shipments, with vessel arrivals at ports decreasing significantly month-on-month. Iron ore inventories at major Chinese ports continued to decline slightly, temporarily easing short-term market supply pressure. Meanwhile, news of strikes at Australian mines has raised concerns about supply contraction; sea freight prices have also strengthened, increasing the landed cost of imported iron ore and further limiting the downside potential of ore prices.
On the demand side, downstream finished steel products have entered the traditional off-season, with a continued pattern of weak supply and demand. Affected by losses, several steel mills in northern China have announced blast furnace maintenance plans. This week, average daily hot metal output fell by 19,800 tons month-on-month to 2.413 million tons, with raw material demand also contracting. Currently, steel mills are adopting a conservative procurement strategy, mainly replenishing stocks in small batches as needed, with spot transactions maintaining moderate activity.
In terms of grade spreads, the spread between medium and low-grade ores narrowed. In the Shandong region, the spread between PB fines and Super Special fines compressed by 4 yuan to 133 yuan/ton; the spread between medium and high-grade ores widened, with the spread between Carajas fines and PB fines expanding by 8 yuan to 162 yuan/ton; the lump-to-fines spread strengthened, with the spread between PB lump and PB fines at Qingdao Port widening by 18 yuan to 197 yuan/ton, as lump ore premiums continued to rise. Activity in the USD spot market remained weak, with Mac fines traded at $97.95/ton and Jimblebar fines traded at the August index minus $4.7/ton.
On the macro front, China is in a policy vacuum window ahead of the July Politburo meeting, with the market generally adopting a wait-and-see attitude. Policy expectations have become a core variable supporting the sentiment for ferrous metals in the medium term. Overseas, global trade frictions continue to escalate, expectations of a Fed rate cut are rising but officials' views are increasingly divided, and external geopolitical risks remain volatile, making it difficult to provide sustained bullish momentum for iron ore.
Overall, the iron ore market continues its volatile pattern amid multiple games between a temporary easing of supply and expectations of production cuts by downstream steel mills. Macro policy expectations, overseas supply disruptions, and weakening end-user demand create a mix of bullish and bearish factors. Ore prices have found short-term bottom support, but a significant rally lacks sustained support from end-user demand.
