Price trend  

According to the SunSirs Commodity Market Analysis System, iron ore prices rose before falling last week (August 16-24, the same below), fluctuating within a narrow range. As of the 24th, the SunSirs Iron Ore Price Index was 783.33 points, down 0.47% month-on-month, as shown in the chart above. Last week's rise followed by a decline in iron ore prices, primarily due to higher spot prices at the beginning of the week. However, as speculative sentiment cooled, downstream steel trading weakened, and the ferrous metal market began to return to fundamentals. Furthermore, the anticipated production restrictions in early September weighed on prices, negatively impacting prices. Consequently, iron ore prices rose before falling, fluctuating within a narrow range last week.

Analysis review

As of August 22nd, imported iron ore inventories at 45 ports nationwide stood at 138.452 million tons, a 259,300-ton increase from the previous week. Daily port throughput was 3.2574 million tons, a decrease of 89,300 tons from the previous week. The number of vessels at port was 92, down by one vessel from the previous week. last week's port inventory situation for iron ore is shown in the chart above. Total imported iron ore inventories at steel mills nationwide stood at 90.6547 million tons, a decrease of 708,600 tons from the previous week. last week's reduced steel mill operating rates have slowed demand for delivery, resulting in reduced port throughput. Increased overseas shipments last week, coupled with declining steel mill profits, will limit steel mill enthusiasm next week, potentially leading to a potential accumulation of port inventories. Further attention should be paid to port iron ore inventory changes next week.

On the supply side, as of August 18th, global iron ore shipments totaled 34.066 million tons last week, a month-on-month increase of 3.599 million tons. Total iron ore shipments from Australia and Brazil reached 27.56 million tons, a month-on-month increase of 2.257 million tons. Australian shipments totaled 16.699 million tons, a month-on-month increase of 74,000 tons. Of this, Australian shipments to China totaled 14.086 million tons, a month-on-month decrease of 392,000 tons. Brazilian shipments totaled 10.861 million tons, a month-on-month increase of 2.183 million tons. Shipments from Australia and Brazil increased slightly last week. Overseas shipments from Australia and Brazil fluctuated cyclically, primarily due to seasonal and weather factors. While short-term shipments may fluctuate, the medium- to long-term outlook for iron ore supply remains ample. Iron ore prices remain reasonably supportive in the near term, and traders are willing to ship. With improved weather, iron ore shipments may increase next week, and iron ore supply is expected to increase.

On the demand side, as of August 22nd, the blast furnace operating rate at steel mills was 83.36%, a 0.23% decrease from the previous week. Blast furnace ironmaking capacity utilization was 90.25%, a 0.03% increase from the previous week. Steel mill profitability was 64.94%, a 0.86% decrease from the previous week. Daily molten iron output was 2.4075 million tons, a 9,000-ton increase from the previous week. As of August 22,  the daily consumption of imported ore at the sample steel mills was 2.9784 million tons, a 6,800-ton decrease from the previous week. Last week, steel mill operating rates declined, but remained high. Coupled with news of production restrictions, manufacturers' enthusiasm for operations had been impacted in the short term. Downstream steel prices have fallen more than raw material prices, leading to a contraction in steel mill profit margins. Iron ore demand is expected to decline slightly next week.

Scrap prices saw a slight decline last week, with prices generally trending downward. This weakening trend was primarily driven by overall market conditions. Steel mills' profits have recently shrunk, cooling production enthusiasm. News of production restrictions has also impacted scrap prices in some regions, negatively impacting demand for scrap. Scrap prices in some regions have adjusted, and the scrap market is expected to remain stable next week.

Future outlook:

In summary, data analysts of SunSirs believe that on the demand side, steel mill profits have begun to shrink, and steel mills' willingness to operate has declined, primarily due to weak terminal purchasing. This has led to a slight reduction in short-term steel mill demand and a decline in speculative trading sentiment among traders. On the supply side, overseas shipments have maintained high levels last week, leading to continued accumulation of port inventories. Overseas shipments are expected to maintain their high levels next week, with supply expected to continue to grow next week. The fundamentals of iron ore supply and demand may shift to a situation of strong supply and weak demand. The current period of persistent high temperatures has weakened downstream terminal purchasing. Last week, driven primarily by macroeconomic factors and news sentiment, iron ore prices initially rose and then fell. Iron ore port inventories are likely to accumulate next week. In the short term, market speculation will cool, and speculative trading will decrease. Iron ore prices are expected to decline slightly next week, with a weakening and volatile trend. Later in the week, attention should be paid to steel mill profits and actual demand from downstream finished products.

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