Report Industry Investment Rating - Not provided in the report Core Viewpoints - The overall supply of iron ore is sufficient, but the structural shortage is expected to continue until the second quarter, and the increase in freight rates due to rising fuel prices will become apparent. Negotiations and the US-Iran war are currently event-driven factors with poor tradability. If these two factors persist, steel mill profits will be under pressure, and the pressure for negative feedback on production cuts will accumulate when downstream demand is weak [3][66]. - The price range for the second quarter is expected to be between 90 and 115 for the Platts 62 index and between 700 and 900 for the iron ore index [4][67]. - Industry risk management advice is to focus on short - selling opportunities [5][68] Summary by Relevant Catalogs 1. Review - In the first quarter of 2026, the iron ore price first declined and then rose, showing a V - shaped trend. From mid - November 2025 to mid - January 2026, the price increased by nearly 100 RMB due to macro - economic improvement, the end of steel mill production cuts, and a decline in coking coal prices. From mid - January to the end of February 2026, the price fell due to weakening fundamentals and market sentiment. From March to the present, the price has risen significantly because of tightened port spot liquidity, the US - Iran war, and weather disturbances [5][6][7] 2. Supply - In the first quarter of 2026, the supply of iron ore was initially loose and then tightened. The cumulative year - on - year growth rate of shipments is around 8%. The cumulative year - on - year growth rate of mainstream ore shipments is over 5%, and non - mainstream ore shipments have maintained a strong growth rate of 13%. The annual iron ore shipments in 2026 are expected to be relatively sufficient, and the cumulative year - on - year growth rate is expected to stabilize around 4% [10] 3. Freight - Fuel oil costs account for about one - third and one - fourth of the freight rates for the C3 (Brazil - China) and C5 (Western Australia - China) routes respectively. Currently, the increase in fuel oil costs has not yet been reflected in freight rates due to a "weak demand + capacity mismatch" situation. In the short term, freight rates will remain volatile and weak, but there is an implicit asymmetric upward risk in the medium term. The recent decrease in the speed of Capesize ships has a certain supporting effect on freight rates, and if demand recovers, it may amplify the upward elasticity of C3 freight rates [31][32] 4. Demand 4.1 Iron Water Production - In the first quarter of 2026, the average daily iron water production was 2.2821 million tons, basically unchanged year - on - year. Steel mill profits have declined significantly, and although iron water production is expected to increase seasonally, downstream demand is uncertain, and steel mill profits are expected to continue to shrink [50] 4.2 Steel Fundamentals - Currently, the apparent demand for the top five steel products is good, and inventory has started to decline. Hot - rolled coils have entered the de - stocking stage, with production slightly increasing and apparent demand recovering. Rebar production and sales have increased seasonally, but as raw material costs rise rapidly, steel mill profits have weakened, and the risk of negative feedback is accumulating [56] 4.3 Steel Exports - Overall, steel exports are under pressure but have support. In January - February 2026, China's steel exports totaled 15.59 million tons, a year - on - year decrease of 8.18%. The decline is due to factors such as a high base last year and new export regulations. In the future, steel exports face challenges such as trade protectionism and geopolitical conflicts, but China's steel still has cost and industrial chain advantages, and the export structure is expected to optimize [59] 5. Inventory - In the first quarter of 2026, the inventory of 47 ports increased from 167 million tons to 178 million tons, showing an over - seasonal inventory build - up, but the price rose against the trend, mainly due to the structural shortage of medium - grade ore. As the scope of sanctions expands, the shortage problem is expected to remain unsolved for the time being [63] 6. Summary and Market Outlook - The structural shortage of iron ore is expected to continue until the second quarter, and the impact of rising fuel prices on freight rates will become apparent. Negotiations and the US - Iran war are event - driven factors. If they continue, steel mill profits will be under pressure, and the pressure for negative feedback on production cuts will accumulate [66] - The price range for the second quarter is expected to be between 90 and 115 for the Platts 62 index and between 700 and 900 for the iron ore index [4][67] - Industry risk management advice is to focus on short - selling opportunities [5][68]