Price trend

Since August, the iron ore market first fluctuated upward, then rose and fell, and the overall trend was narrow fluctuations. According to the iron ore price tracking data of SunSirs, as of the 29th, the SunSirs Iron Ore Price Index was 786 points, a month-on-month decrease of 0.03%. Among them, it reached the highest point of the month at 794.78 on the 9th, and the increase reached 1.09%, as shown in the figure above.

Analysis review

Looking back at the iron ore market in August, the price of iron ore first fluctuated upward, and then rose and fell. The data analysts of SunSirs believe that it can be roughly divided into two stages: the first is a volatile upward trend. In the first and middle weeks of August, although the terminal off-season effect continued, the profit level of steel mills was good, and the enthusiasm of steel mills to start production supported the release of iron ore demand, thereby forming a certain support for the price of ore. In addition, the market was affected by the "anti-involution" news, and the speculative trading sentiment was positive, which in turn pulled up the spot iron ore price, so the price of ore showed a volatile upward trend.

Secondly, it rose and then fell. By mid-to-late August, due to the increasingly prominent off-season effect in downstream industries, the restocking operation in the downstream building materials market slowed down, steel transaction volume weakened, and some steel mills began maintenance operations. Hot metal production declined, and the fundamentals of iron ore shifted to a pattern of increased supply and decreased demand. Hot metal production showed a downward trend, and market sentiment returned to rationality, resulting in a decline in the spot price of iron ore. Therefore, the price of ore showed a trend of rising and then falling.

Inventory: As of August 29th, imported iron ore inventories at 45 ports nationwide stood at 137.63 million tons, a weekly decrease of 821,800 tons and a monthly increase of 1.05 million tons. Daily port throughput was 3.18 million tons, a weekly decrease of 71,000 tons and a monthly increase of 15.93 tons. The number of vessels at port was 101, an increase of 5 compared to the end of July. Last week's port inventory situation for iron ore was shown in the chart above. Total imported iron ore inventories at steel mills nationwide stood at 90.07 million tons, a monthly decrease of 49,000 tons. Since August, steel mill profits have remained strong, leading to increased demand for delivery, resulting in a monthly increase in daily port throughput. This positive profit outlook has led to increased production activity at steel mills, resulting in a continuous depletion of on-site inventories. However, with the resumption of overseas shipments since August, port inventories have begun to stabilize and increase. At this stage, the subsequent steel market situation still depended on the downstream steel transaction situation. If the steel market can still grow in September, the steel mills' iron ore demand can be expected to release resilience, and the iron ore port inventory may continue to decline.

On the supply side, as of August 25th, global iron ore shipments totaled 33.158 million tons that week, a month-on-month increase of 1.149 million tons. Total iron ore shipments from 19 ports in Australia and Brazil reached 27.604 million tons, a month-on-month increase of 45,000 tons. Australia shipped 19.448 million tons, an increase of 852,000 tons. Of this, Australia shipped 17.172 million tons to China, a month-on-month increase of 1.668 million tons. Brazil shipped 8.156 million tons, a month-on-month decrease of 808,000 tons. Due to seasonal factors, overseas shipments began to recover in August. With the iron ore market still favorable in August and overseas shipments showing good momentum, port arrivals are expected to remain high in September, especially as the weather improves. Overall supply is expected to remain relaxed in September.

On the demand side, blast furnace utilization at steel mills remained stable at a high level in August, primarily due to stable steel mill profits, strong production enthusiasm, and high hot metal production. Due to restrictions on downstream terminal operations in August, steel supply was weak. In the short term, steel mill profits can still support production levels. Starting in September, as temperatures begin to drop across the country, terminal operations will gradually improve, boosting hot metal demand. However, the specific extent of the increase will depend on steel mill profits and downstream steel transaction conditions. Iron ore demand may see a slight increase in early September.

Regarding scrap steel, prices have initially risen and then stabilized since August, trending higher. This was primarily driven by the overall upward trend in ferrous metals, which in turn impacted scrap steel prices. Since August, steel mill profits have improved, with production running at high levels and blast furnaces resuming operations. Furthermore, the continued impact of the "anti-involution" policy during August has been positive for the scrap steel market. With downstream production gradually resuming in September, the scrap steel market is expected to fluctuate within a narrow range in September.

Market outlook

In summary, SunSirs’ data analysts believe that on the demand side, steel mill profits maintained good in August, blast furnace production resumed in large numbers, and hot metal production also remained high. Terminal demand is expected to increase in September, which is positive for hot metal demand. On the supply side, due to seasonal factors, overseas shipments resumed in August, and overall port inventories increased. Overseas shipments were strong in August, and overall supply remained strong. September is the traditional peak season for the steel market, and the resumption of terminal production is positive for the industry as a whole. Overall, the iron ore supply and demand fundamentals may shift to a situation of both supply and demand growth in September. Overall, steel mill profits are temporarily healthy, and iron ore demand is resilient. It is expected that iron ore may rise first and then fall in early September, and will fluctuate in a stronger direction.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.