Report Investment Rating - No investment rating information is provided in the report. Core View - In Q1 2026, iron ore prices fluctuated at a high level, and the Platts index remained around $100 for the 7th consecutive quarter. The fundamental contradictions were slowly accumulating, but the price failed to show a clear trend due to disturbances such as the Middle East energy conflict and long - term contract negotiations. The supply and demand of iron ore were both facing uncertainties. Supply was affected by energy re - evaluation and potential diesel supply disruptions, while demand was at risk of shrinking due to factors like weak downstream demand and high inventory of finished products [2][5][30]. Summary by Section Q1 Iron Ore Performance Review - **Price and Supply - Demand Situation**: In Q1 2026, iron ore prices fluctuated at a high level. The Platts index remained around $100. The supply increased as expected, with the cumulative shipping volume increasing by about 21 million tons in the first quarter. The demand for steel started sluggishly, and the cumulative year - on - year of 247 - caliber hot metal was flat. The domestic port iron ore inventory increased by 12 million tons since the first quarter. The weak terminal demand for finished products limited the upward space of iron ore prices, with the 3350 - yuan pressure level of hot - rolled coils determining that the iron ore price was difficult to break through the $110 pressure level [2][5]. - **Structural Changes**: Since Q2 last year, mines such as Rio Tinto and Vale reduced product grades, and Iranian pellet supply was suspended due to the Middle East issue. The price differences between varieties gradually recovered. Since the first quarter, the premiums of high - and low - grade ores, pellets, and lump ores have all strengthened. The internal - external price difference fluctuated sharply due to exchange rate factors, expanding from January to February and rapidly converging since March [8]. Supply - **Shipping Volume Changes**: In Q1 2026, the global iron ore shipping volume increased by 21 million tons cumulatively, with significant regional differences. Australia's single - quarter cumulative increase was about 16 million tons, Brazil's cumulative decrease was 4 million tons, and West Africa (including Guinea, Sierra Leone, and Liberia) showed strong performance with a quarterly cumulative increase of 3.7 million tons. Other regions showed little change year - on - year [11][14]. - **Energy Impact**: With the continuous conflict between the US and Iran, the market gradually priced in the increase in freight and mining production disturbances. For example, in the Brazilian production area, every $10 increase in crude oil raises the total landed cost of iron ore by $3 per ton. As of the end of March, the theoretical calculation value of C3 increased by $7 per ton, and the current freight has fully reflected the impact. The mining production disturbances include cost increases and potential diesel supply disruptions. The latter depends on the duration of the blockade of the Strait of Hormuz. For Brazilian iron ore, a $10 increase in crude oil corresponds to a $0.7 increase in mining costs, and the current increase in crude oil to $100 has led to a $2.1 increase in mining costs per ton and a $9 increase in the CFR landed cost per ton. The risk of open - pit mine supply disruption due to long - term diesel shortage may be more prominent in April, but its development is highly uncertain [17][21]. Demand - **Downstream Demand Situation**: Although the supply side has the risk of energy valuation increase and potential diesel supply disruption, the downstream transmission faces many obstacles. Since the first quarter, the direct export of steel has slightly turned negative, the growth rate of the manufacturing industry has slowed down, and the inventory of finished products is seasonally high. After the hot - rolled coil price rebounded to the previous level of 3350 yuan/ton, it became more difficult for downstream customers to place orders. As of the end of March, steel mills generally still had a small profit of 50 - 100 yuan. The seasonal resumption of production in March - April is expected to proceed as scheduled. The overall real - world pressure on the black industry chain remains due to uncertain external demand, high terminal inventory, and the unchanged hot - metal production [25]. Summary and Outlook - **Uncertainty in the Market**: Since March, with the continuous conflict between the US and Iran, both energy supply and long - term demand face high uncertainty. The fundamental factors have further weakened, and the market oscillates between the contraction of mineral resources and the long - term shrinkage of demand. The energy price is likely to remain at a relatively high level in the second quarter. Mineral resources including iron ore may face risks such as increased mining costs and higher freight. At the same time, downstream demand is evolving under short - term high - price substitution and long - term shrinkage. The overall market is in a wait - and - see state due to unclear supply and demand [30].