According to the commodity market analysis system of SunSirs, iron ore prices rose first and then fell last week (5.3-5.11), and fluctuated in a narrow range.
Last week, iron ore prices rose first and then fell, and fluctuated in a narrow range. The main reason was that the macro news improved, overseas sentiment eased, and there was a positive impact of the domestic reserve requirement cut, but the market did not accept it well. At the same time, steel mills were mainly based on rigid demand. After the profit of steel mills improved, the purchasing enthusiasm was good, which supported the growth of daily average molten iron output. However, the high level of molten iron output may decline, so the price of iron ore rose first and then fell last week, and fluctuated in a narrow range.
Forecast of the trend of ore prices this week:
In terms of inventory, as of May 9, the inventory of imported iron ore in 45 ports across the country was 142.3871 million tons, a decrease of 637,700 tons from the previous month; the average daily port clearance volume was 3.1521 million tons, a decrease of 166,300 tons from the previous week; the number of ships in the port was 79, a decrease of 9 from the previous week. Last week, the total inventory of imported iron ore in steel mills nationwide was 89.5898 million tons, a decrease of 376.07 tons from the previous week. Last week, the demand for replenishment purchases by steel mills continued to be released, so the port clearance volume remained high. In addition, the profit recovery of steel mills and the high production enthusiasm made it highly likely that steel mills would maintain the current production situation this week. There was a trend of destocking in port inventories this week, and more attention should still be paid to the changes in port iron ore inventories.
In terms of supply, as of May 5, the total global iron ore shipments last week were 30.505 million tons, a decrease of 1.377 million tons from the previous month; the total iron ore shipments from 19 ports in Australia and Brazil were 25.404 million tons, a decrease of 2.18 million tons from the previous month. Australia's shipments were 17.692 million tons, a decrease of 2.26 million tons from the previous month, of which Australia's shipments to China were 15.184 million tons, a decrease of 1.288 million tons from the previous month. Brazil's shipments were 7.712 million tons, an increase of 80,000 tons from the previous month. Australia and Brazil's shipments decreased slightly last week. The cyclical changes in overseas shipments from Australia and Brazil are mainly affected by seasons and weather. Short-term shipments have changed. In the medium and long term, the loose supply of iron ore has not changed. Iron ore shipments have fallen this week, and it is expected that the supply of iron ore will be reduced this week.
In terms of demand, as of May 9, the blast furnace operating rate of steel mills was 84.62%, a weekly increase of 0.29%; the blast furnace ironmaking capacity utilization rate was 92.09%, a weekly increase of 0.09%; the steel mill profit rate was 58.87%, a month-on-month increase of 2.59%; the average daily molten iron output was 2.4564 million tons, an increase of 2,200 tons from the previous month; the current daily consumption of imported ore in the sample steel mills was 3.039 million tons, a month-on-month decrease of 2,300 tons.
Last week, the operation of steel mills was at a high level, and the enthusiasm for operation was high. At this stage, steel mills' profits continue to recover, the scale of steel mills' operation is stable, and the resumption of production is active. However, many steel mills have recently undergone maintenance operations. The output of molten iron is expected to decrease this week, and the release of iron ore demand is expected to be slightly reduced this week.
In terms of scrap steel, the price of scrap steel fell slightly last week and weakened. The price of scrap steel weakened last week; although the profit situation of steel mills continues to recover and the enthusiasm for operation is good, the entire black series market has fluctuated repeatedly due to the impact of tariffs recently, so the scrap steel price in some regions has been adjusted. It is expected that the scrap steel market will continue to stabilize this week.
In summary, the data analyst of SunSirs believes that on the demand side, the profits of steel mills continue to grow, so there is a high probability that the current scale of operation will be maintained, but steel mills in many places have undergone maintenance operations, and the overall demand situation is expected to be reduced; on the supply side, overseas shipments changed cyclically last week, port inventories continued to be destocked, overseas shipments fell this week, and the supply was reduced overall. The fundamentals of iron ore supply and demand maintained a double decline in supply and demand. At this stage, the weather continues to improve, and the terminal operation is good. Last week, it was mainly affected by macro factors and the active futures market, which led to a narrow fluctuation in the price of ore. This week, it was affected by fundamentals.
It is expected that iron ore will rise first and then fall, and will fluctuate weakly. In the later period, attention should be paid to the profit situation of steel mills and the actual demand of finished products downstream.
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