In December, the domestic market entered the off-season for steel consumption, leading to a slight decline in steel production. Influenced by a modest rebound in steel prices and winter stockpiling, iron ore prices saw a slight increase. In the coming period, steel production is expected to continue declining, while port inventories of iron ore will rise slightly. As a result, the iron ore market will increasingly show a supply-demand imbalance, making it difficult for iron ore prices to sustain their upward trend and instead likely to fluctuate.

　　I. China’s iron ore price index has turned from declining to rising.

　　According to monitoring by the China Iron and Steel Association, at the end of December, the China Iron Ore Price Index (CIOPI) stood at 253.39 points, up 11.47 points from the previous month, representing an increase of 4.74%. Specifically: the domestic iron ore price index was 238.94 points, down 9.44 points from the previous month, a decrease of 3.80%; while the imported iron ore price index was 255.57 points, up 14.62 points from the previous month, an increase of 6.07%.

　　Looking at the average level for the entire month, the China Iron Ore Price Index (CIOPI) was generally lower than the previous month. In December, the CIOPI composite index averaged 248.73 points, down 14.57 points from the previous month, representing a decline of 5.53%. Specifically: the average index for domestically produced iron ore stood at 238.88 points, a decrease of 16.22 points from the previous month, or a drop of 6.36%; while the average index for imported iron ore came in at 250.22 points, down 14.32 points month-on-month, corresponding to a decline of 5.41%.

　　II. Domestic iron ore concentrate continues to decline, while the price of imported fine ore has shifted from declining to rising.

　　At the end of December, the tax-inclusive price of domestically produced iron ore concentrate from CIOPI was 614.84 yuan per ton, down 24.29 yuan per ton from the previous month, representing a decline of 3.80%. The CIF price of imported iron ore fines from CIOPI was 69.03 U.S. dollars per ton, up 3.95 U.S. dollars per ton from the previous month, an increase of 6.07%.

　　Looking at the average monthly level, the average tax-inclusive price of domestically produced iron ore concentrate was 614.67 yuan per ton, down 41.75 yuan per ton from the previous month, representing a decline of 6.36%. Specifically: From December 3 to December 10, the price fluctuated downward from 624.77 yuan per ton to 605.38 yuan per ton; from December 10 to the end of the month, the price rebounded from 605.38 yuan per ton to 614.84 yuan per ton amid volatile movements.

　　The average landed price of imported fine ore was $67.58 per ton, down $3.87 per ton from the previous month, representing a decline of 5.41%. Specifically: From December 3 to December 11, the price fluctuated between $66.26 per ton and $66.06 per ton; from December 11 to the end of the month, the price rose from $66.06 per ton to $69.03 per ton.

　　III. Analysis of the Later Trend in Iron Ore Prices

　　Since the onset of winter, downstream demand will weaken somewhat, and steel production will further decline. As a result, demand for iron ore will slacken, and inventories will shift from declining to rising. Thus, the supply-demand imbalance in the iron ore market persists, making it difficult for prices to sustain their upward trend.

　　1. Production of pig iron and crude steel declined month-on-month, and demand for iron ore weakened.

　　According to the bi-weekly report from the Iron and Steel Association, during the first half of December, the average daily crude steel production of member iron and steel enterprises was 1.8623 million tons. The estimated national daily crude steel production was 2.3885 million tons, down 7.69% from November. The estimated national daily pig iron production was 1.9818 million tons, a decrease of 6.70% from November. Both crude steel and pig iron production declined month-on-month, and demand for iron ore showed a slight drop in intensity.

　　2. Iron ore port inventories have shifted from declining to rising, and the situation of supply exceeding demand remains unchanged.

　　At the end of December, the nationwide inventory of imported iron ore at ports stood at 142 million tons, up by 1.21 million tons from the previous month, representing an increase of 0.86%. Overall, the inventory remains at a relatively high level. From January to November this year, cumulative iron ore imports totaled 978 million tons, roughly on par with last year’s figure. Overall, the iron ore market continues to be characterized by a supply-demand imbalance, and no significant improvement is in sight.

　　3. Steel prices have been fluctuating within a narrow range, and iron ore prices are finding it difficult to rise significantly.

　　According to monitoring by the China Iron and Steel Association, the China Steel Price Index (CSPI) stood at 107.12 points at the end of December, up 0.73 points from the end of November—a rise of 0.69%. Looking at weekly trends, steel prices have been fluctuating within a narrow range, making it difficult for the market to stage a significant rebound in the near term. According to data from the National Bureau of Statistics, China’s manufacturing Purchasing Managers’ Index (PMI) came in at 49.4% in December, down 0.6 percentage points from the previous month and falling below the critical threshold for the first time this year. Overall, iron ore prices are unlikely to see a substantial increase in the coming period and are expected to remain volatile.