Price trend

According to the Commodity Market Analysis System of SunSirs, the price of iron ore rose first and then fell last week (6.28-7.5, the same below), with a narrow range of fluctuations. As of the 5th, the SunSirs’ Iron Ore Price Index was 737.33 points, up 1.87% month on month, as shown in the above chart. Last week, the price of iron ore first fell and then rose, with a trend of strong fluctuations. The main reason for this was the resumption of coal production, which had affected the price of iron ore due to the downward movement of raw material prices. With the concentrated release of terminal procurement demand and the tightening of environmental protection policies in Tangshan, the rise in steel prices can drive the price of iron ore to rise; In terms of supply and demand, due to the low price of iron ore combined with the rise and fall of coke, steel mills had good profits, and steel mills had actively started production to support iron ore. However, the daily production of molten iron had shown a downward trend, and port inventories also stabilized. Therefore, last week, iron ore prices had slightly increased and fluctuated strongly.

Analysis review

In terms of inventory, as of July 4th, the imported iron ore inventory in 45 ports across the country was 138.784 million tons, a decrease of 518,300 tons compared to the previous month; The daily average port clearance volume was 3.1929 million tons, with a decrease of 66,500 tons compared to the surrounding area; There were 92 ships in port, with an increase of 7 ships per week. The inventory situation of iron ore ports last week was shown in the above figure; The total inventory of imported iron ore by steel mills nationwide was 89.1857 million tons, an increase of 71.1 tons compared to the previous week. Last week, the demand for steel mill replenishment procurement had slowed down, resulting in a decrease in port clearance volume. Although steel mills had good profits and are operating actively, the industry's off-season effect was fermenting, and steel mills are expected to see a decline in iron production this week. Last week, there had been an increase in the number of ships arriving at the port, coupled with a slowdown in the release of purchasing demand from steel mills. There is a possibility of accumulated inventory at the port this week, and it is still necessary to pay more attention to changes in the port's iron ore inventory this week.

In terms of supply, as of June 30th, the total global shipment of iron ore last week was 33.576 million tons, a decrease of 1.491 million tons compared to the previous week; The total shipment of iron ore from Australia and Brazil was 28.823 million tons, a decrease of 1.785 million tons compared to the previous period. Australia's shipping volume was 19.99 million tons, a decrease of 1.109 million tons compared to the previous period, of which 17.768 million tons were shipped from Australia to China, a decrease of 418,000 tons compared to the previous period. Brazil shipped 8.833 million tons, a decrease of 677,000 tons compared to the previous period. Last week, shipments from Australia and Brazil slightly decreased. The overseas shipping volume of Australia and Brazil is subject to cyclical changes, mainly influenced by seasons and weather conditions. Short term shipping may vary, but in the medium to long term, the loose supply pattern of iron ore remains unchanged. Next week, the shipping volume of iron ore will slightly decline, and it is expected that the supply of iron ore will be reduced.

In terms of demand, as of July 4th, the operating rate of steel mills' blast furnaces was 83.46%, a decrease of 0.36% compared to the previous week; The utilization rate of blast furnace ironmaking capacity was 90.29%, with a decrease of 0.54% in the circumferential ratio; The steel mill's profit margin was 59.31%, unchanged from the previous month; The daily average production of molten iron was 2.4085 million tons, a decrease of 14,400 tons compared to the previous period; The daily consumption of imported ore by sample steel mills was 3.0081 million tons, a decrease of 0.44 million tons compared to the previous period. This week, steel mills were still operating at a high level, and the decrease in raw material costs had maintained good profits for steel mills. However, the off-season in the industry led to a reduction in iron ore production. Nevertheless, manufacturers had shown good enthusiasm for starting production and were mostly taking advantage of the situation to maintain equipment. It is expected that the demand for iron ore will be slightly reduced this week.

In terms of scrap steel, the price of scrap steel first fell and then rose last week, mainly stabilizing. Last week, the price of scrap steel is mainly stabilizing. As of July 5th, the profit situation of steel mills was good, and the enthusiasm for starting production was good. However, the market situation was in the off-season, which was not conducive to the upward trend of the black series market. However, the decline of coke has been favorable for scrap steel demand, and scrap steel prices had been adjusted in some areas. It is expected that the scrap steel market will continue to stabilize next week.

Market outlook

In summary, the data analyst from Business Society believes that on the demand side, steel mills have good profits and enthusiasm for starting production, but the release of terminal demand was slowing down, and the overall demand situation is expected to decrease; On the supply side, there were yclical changes in overseas shipments this week, with a slight decrease in port inventory. Next week, overseas shipments will be reduced, resulting in an overall decline in supply. The fundamentals of iron ore supply and demand may maintain a situation of both supply and demand reduction. As of July 4th, the weather was gradually rising, affecting the terminal operation situation. Last week, it is mainly affected by the improvement of the macro situation, and the iron ore industry had rebounded from the beginning to the end of the week. There is a possibility of accumulated inventory in the iron ore port next week, coupled with negative fundamentals for iron ore. It is expected that iron ore will rise first and then fall, weaken and fluctuate next week. In the later stage, attention should be paid to the profit situation of steel mills and the actual demand of downstream finished products.

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