Price trend

According to the Commodity Market Analysis System of SunSirs, the price of iron ore rose first and then fell last week (7.12-7.19, the same below), with a narrow range of fluctuations. As of the 19th, the SunSirs Iron Ore Price Index was 779.22 points, up 2.18% month on month, as shown in the above chart. Last week, the price of iron ore slightly increased and was trending towards strength, mainly due to the continuous fermentation of the market's "anti involution" news, which had driven the upward trend of finished products, stimulated speculative demand for iron ore, and combined with changes in production costs, which was favorable for the industry market, thus driving the price of iron ore to rise; In terms of supply and demand, due to the downward shift in raw material costs, steel mills had good profits, and the active operation of steel mills provided support for iron mines, resulting in insufficient downward momentum for the daily production of molten iron. As overseas shipments continued to decline, iron ore prices had slightly increased and strengthened this week.

Analysis review

In terms of inventory, as of July 18th, the imported iron ore inventory in 45 ports across the country was 137.8521 million tons, an increase of 193,200 tons compared to the previous month; The daily average port clearance volume was 3.2274 million tons, with an increase of 32,300 tons compared to the surrounding area; There were 98 ships in the port, with a decrease of 5 ships in the surrounding area. The inventory situation of iron ore ports this week was shown in the above figure; The total inventory of imported iron ore by steel mills nationwide was 88.2216 million tons, a decrease of 157.48 tons compared to the previous week. This week, the profit situation of steel mills had improved, and the demand for replenishment procurement had been slightly concentrated, resulting in an increase in port clearance volume. Last week, the profits of steel mills were good, and the enthusiasm for starting work was high. The daily port clearance volume had increased. Although overseas shipments were reduced, the number of ships arriving at the port this week had increased. In addition, some steel mills had equipment maintenance plans, and there may be accumulated inventory at the port next week. It is still necessary to pay more attention to the changes in port iron ore inventory next week.

In terms of supply, as of July 14th, the total global shipment of iron ore last week was 29.871 million tons, a decrease of 78,000 tons compared to the previous week; The total shipment of iron ore from Australia and Brazil was 25.588 million tons, an increase of 938,000 tons compared to the previous period. The shipping volume from Australia was 17.383 million tons, a decrease of 643,000 tons compared to the previous period, of which 14.301 million tons were sent from Australia to China, a decrease of 236,000 tons compared to the previous period. Brazil shipped 8.205 million tons, an increase of 1.581 million tons compared to the previous period. Last week, there was a slight reduction in shipments from Australia and a significant increase in shipments from Brazil. The overseas shipping volume of Australia and Brazil was subject to cyclical changes, mainly influenced by seasons and weather conditions. Short term shipping may experience some changes, while in the medium to long term, the loose supply pattern of iron ore remains unchanged. Next week, the shipping volume of iron ore may drop sharply and increase again, and it is expected that the supply of iron ore will recover next week.

In terms of demand, as of July 18th, the operating rate of steel mills' blast furnaces was 83.46%, with a weekly increase of 0.31%; The utilization rate of blast furnace ironmaking capacity was 90.89%, with an increase of 0.99% in the circumferential ratio; The profit margin of steel mills was 60.17%, an increase of 0.43% compared to the previous period; The daily average production of molten iron was 2.4244 million tons, an increase of 26,300 tons compared to the previous period; The daily consumption of imported ore by sample steel mills was 3.0125 million tons, an increase of 27,600 tons compared to the previous period. Last week, the construction of steel mills continued to operate at a high level, and the downward shift in production costs had led to an increase in profits for steel mills. However, the situation of downstream terminal construction being restricted had become increasingly severe with the weather. Nevertheless, manufacturers had shown good enthusiasm for construction and had mostly carried out equipment maintenance. It is expected that the demand for iron ore will release slightly next week.

In terms of scrap steel, the price of scrap steel fluctuated upward this week, with a focus on strengthening operations. Last week, the price of scrap steel was mainly driven by the overall market trend. As of July 19th, the profit situation of steel mills was good, and the enthusiasm for starting production was good. Influenced by the overall upward trend of the black series market, scrap steel prices in some areas had also increased. The decrease in coke was favorable for the release of scrap steel demand, and scrap steel prices in some areas had been adjusted. It is expected that the scrap steel market will continue to stabilize next week.

Future outlook:

In summary, the data analyst from SunSirs believes that on the demand side, the profit status of steel mills was good, and the willingness of steel mills to start production was positive, mainly limited by the terminal production situation. In the short term, it is slightly released by the overall market demand situation; On the supply side, there were cyclical changes in overseas shipments last week, with slight accumulation of port inventory. Overseas shipments will resume next week, and overall supply will increase. The supply and demand fundamentals of iron ore may turn into a situation of dual increase in supply and demand. As of July 19th, the weather was gradually rising, and downstream terminal production was severely restricted. Last week, iron ore continued to rise mainly due to the influence of macro and news sentiment. There is a possibility of accumulating inventory at the iron ore port next week, but the fundamentals are favorable for iron ore. Coupled with market sentiment favoring iron ore, it is expected that iron ore may rise first and then fall, and fluctuate towards strength. In the later stage, attention should be paid to the profit situation of steel mills and the actual downstream demand for finished products.

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