Price trend

According to the Commodity Market Analysis System of SunSirs, the price of iron ore rose first and then fell last week (7.19-7.26, the same below), with a narrow range of fluctuations. As of the 26th, the SunSirs’ Iron Ore Price Index was 795.67 points, up 2.11% month on month, as shown in the above chart.

Last week, the price of iron ore had 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 last week.

Analysis review

In terms of inventory, as of July 25th, the imported iron ore inventory in 45 ports across the country was 137.9038 million tons, an increase of 51,700 tons compared to the previous month; The daily average port clearance volume was 3.1515 million tons, with a decrease of 75,900 tons compared to the surrounding area; There were 102 ships in the port, with an increase of 4 ships in the surrounding area. 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 88.8522 million tons, an increase of 63.06 tons compared to the previous week. After the decrease in molten iron production last week, steel mills' profits increased, and the demand for replenishment procurement slowed down, resulting in a reduction in port clearance. Last week, the profits of steel mills had improved. Although the willingness to start production remained strong, there had been an increase in overseas shipments and ships arriving at ports. In addition, some steel mills had plans for equipment maintenance, and there may be a possibility of accumulated inventory at ports next week. Therefore, it is still necessary to pay more attention to changes in port iron ore inventory next week.

In terms of supply, as of July 21st, the total global shipment of iron ore last week was 31.091 million tons, an increase of 1.22 million tons compared to the previous week; The total shipment of iron ore from Australia and Brazil was 25.52 million tons, a decrease of 68,000 tons compared to the previous period. The shipping volume from Australia was 16.294 million tons, a decrease of 1.089 million tons compared to the previous period, of which 14.436 million tons were sent from Australia to China, an increase of 135,000 tons compared to the previous period. Brazil shipped 9.226 million tons, an increase of 1.021 million tons compared to the previous period. Last week, there was a slight reduction in shipments from Australia and a slight 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 had undergone some changes. In the medium to long term, the loose supply pattern of iron ore had not changed. With the rise of iron ore prices, merchants had a strong willingness to ship. The shipping volume of iron ore may continue to increase next week, and it is expected that the supply of iron ore will recover to some extent next week.

On the demand side, as of July 25th, the operating rate of steel mills' blast furnaces was 83.46%, unchanged from the previous week; The utilization rate of blast furnace ironmaking capacity was 90.81%, and the circumferential ratio had decreased by 0.08%; The profit margin of the steel mill was 63.64%, an increase of 3.47% compared to the previous period; The daily average production of molten iron was 2.4223 million tons, a decrease of 0.21 million tons compared to the previous period; The daily consumption of imported ore by sample steel mills was 3.011 million tons, a decrease of 0.15 million 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, due to the lack of downstream terminal construction, manufacturers had shown good enthusiasm for starting production and had mostly carried out equipment maintenance. It is expected that the demand for iron ore will be slightly reduced next week.

In terms of scrap steel, the price of scrap steel fluctuated upward last 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 26th, 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. Steel mills often take advantage of the situation to maintain their equipment, and the short-term demand for steel mills had slightly decreased. However, traders had strong speculative trading sentiment; 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 supply will continue to grow. The supply and demand fundamentals of iron ore may shift towards a situation of increased supply and decreased demand. As of July 26th, hot and rainy weather was frequent, and downstream terminal construction was greatly restricted. Last week, it was mainly driven by macro and news sentiment, which had driven the rise of iron ore prices. There is a possibility of accumulated inventory in the iron ore port next week. In the short term, the market speculation sentiment is optimistic about iron ore, and speculative trading is predominant. It is expected that iron ore may rise first, then fall, and fluctuate towards strength next week. Pay attention to the risk of correction, and in the later stage, pay attention to the profit situation of steel mills and the actual downstream demand of finished products.

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