After the Spring Festival, domestic import prices have fallen sharply by nearly 50 yuan / wet ton, mainly due to the large drop in external disk prices during the Spring Festival and the sharp decline in the general index. On the other hand, domestic steel mills are basically full of replenishment before the holiday, leading to a sharp reduction in purchase frequency and demand after the Spring Festival and a drop in prices.
According to the price data of SunSirs, as of February 4, the average price of 62% PB powder ore in Australia was 648.67 yuan / wet ton, and the price of 63.5% coarse powder in Brazil was 706.38 yuan / wet ton. 586.83 yuan / wet ton, which fell by 7.19%, 6.36%, and 4.94% respectively compared with those before the Spring Festival. The year-on-year increases were only 0.50% and 8.17%, while the price of printing powder had fallen by 1.79% year-on-year. Overall, the price of ore in early February has fallen back to the level before the Brazilian mine disaster in 2019.
According to the data of the SunSirs, as of February 4, the 62% popular index was 83.05, a 3.25 increase from February 3, but according to the start and end of the Spring Festival (January 23 to February 3), the general index The index fell from 92.05 to 79.8, a sharp drop of 12.7. The general index is settled in US dollars / wet ton, so if calculated in accordance with the exchange rate of the past week, the decline is as high as 86 yuan / wet ton. The pressure on domestic imported ore prices has fallen significantly. It is worth noting that the market price of Singapore's iron ore swaps also fell sharply during the Spring Festival, which also prompted the domestic imported ore prices to plummet after the Spring Festival.
According to data from the SunSirs, as of February 3, the price of 63.5% India powder outside the disk was 72.40 US dollars / wet ton, compared with January 23 prices fell 12.35 US dollars / ton, and almost continued to fall for more than 10 days. It has also weighed on the price of domestic imported ore.
Therefore, from the perspective of the external disk market, the overall is still negative for domestic imported ore. Although the external disk price rose 3.25 on the 4th, and the futures of domestic large commercial firms also surged, the main technical rebound was the domestic futures after the opening and closing of the market after the Spring Festival. The overall demand for its ore fundamentals remained unchanged.
According to the data of the SunSirs, during the Spring Festival, the blast furnace operating rate of 247 steel plants nationwide was 78.51%, a slight increase of 0.93% compared with that before the Spring Festival. On the other hand, the average inventory of imported ore by steel mills in the current period was 42 days, a record high; and the total inventory of imported sintered powder was 22,470,900 tons, which also reached a record high. Therefore, although the operating rate of steel mills during the Spring Festival has not decreased, the overall consumption of imported ore stocks is still under pressure. Therefore, after the holiday, it is difficult for steel mills to increase purchase demand for imported ore in the short term, mainly to clear inventory.
To sum up, analyst Hangsheng He believes that after the Spring Festival, the price of domestic imported ore still fell. And with the increasingly stringent epidemic prevention and control, delayed resumption of downstream factories, and basic stagnation of logistics and transportation, even if steel produced by steel mills has not consumed much demand in the short term, and the current national steel social inventory has increased sharply around the Spring Festival 6 million tons, so this part will still be consumed first. Therefore, it is expected that steel mills will have a large-scale shutdown and reduction in the near future, which will facilitate the consumption of internal ore on the one hand, and market stock on the other. At this point, it is expected that ore prices will fall mainly in mid-to-late February, and the inflection point is expected to be in early March. The preliminary price range may be 630-660 yuan / wet ton.
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