Price trend

According to the SunSirs Commodity Market Analysis System, iron ore prices first rose and then fell last week (September 6-13, hereinafter), fluctuating within a narrow range. As of the 13th, the SunSirs Iron Ore Price Index was 808 points, up 1.32% month-on-month, as shown in the chart above. Last week's decline followed by a slight increase in iron ore prices was primarily due to market sentiment boosted by news of iron ore supply from Guinea, Brazil, and India at the beginning of the week. This, coupled with price increases and price reductions for coke, supported steel mill profits. Consequently, iron ore prices initially rose before falling, with a slight upward trend.

Analysis review

Inventory: As of September 12, imported iron ore inventories at 45 ports nationwide stood at 138.4947 million tons, a 241,500-ton increase from the previous month. Daily port throughput was 3.3128 million tons, a 135,000-ton increase from the previous week. The number of vessels at port was 100, a decrease of four from the previous week. This week's port iron ore inventory situation is shown in the chart above. Total imported iron ore inventories at steel mills nationwide stood at 89.9305 million tons, a 531,800-ton increase from the previous week. Maintaining steel mill operating conditions last week had led to a recovery in demand for steel mill deliveries, resulting in increased port throughput. Reduced overseas shipments last week, coupled with fewer vessels at ports, may lead to a potential destocking of port inventories next week. Further monitoring of port iron ore inventory is warranted next week.

On the supply side, as of September 8th, global iron ore shipments totaled 27.562 million tons last week, a decrease of 8.006 million tons from the previous month. Total iron ore shipments from Australia and Brazil totaled 23.296 million tons, a decrease of 5.725 million tons from the previous month. Australian shipments totaled 18.224 million tons, a decrease of 722,000 tons from the previous month. Of this, Australian shipments to China totaled 15.313 million tons, an increase of 15,000 tons from the previous month. Brazilian shipments totaled 5.072 million tons, a decrease of 5.003 million tons from the previous month. Shipments from both Australia and Brazil decreased significantly 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 the ample iron ore supply remains. With the traditional peak season approaching, traders are eager to ship. Iron ore shipments may increase next week, and a slight increase in iron ore supply is expected.

On the demand side, as of September 12, the blast furnace operating rate at steel mills was 83.83%, a 3.43% increase from the previous week. Blast furnace ironmaking capacity utilization was 90.18%, a 4.39% increase from the previous week. Steel mill profitability was 60.17%, a 0.87% decrease from the previous week. Daily molten iron output was 2.4055 million tons, a 117,100-ton increase from the previous week. The daily consumption of imported ore at the sampled steel mills was 2.9665 million tons, a further 159,800-ton increase from the previous week. Last week, steel mill operating rates increased, with profits supported by the increase and decrease in coke prices. Following the lifting of environmental protection restrictions, the resumption of steel mill production is positively impacting iron ore demand, and a slight increase in iron ore demand is expected next week.

Regarding scrap steel, scrap prices saw a slight upward trend last week, with a stronger trend. This trend was primarily driven by the overall ferrous metals market. The price increase and decrease in coke prices last week temporarily stabilized steel mill profits. Following the lifting of environmental restrictions, steel mills are actively operating, leading to increases in scrap prices in some regions. This is positive for the release of scrap steel demand, leading to some adjustments in scrap prices in some regions. The scrap steel market is expected to remain stronger next week.

Market outlook

In summary, data analysts of SunSirs believe that on the demand side, steel mill profits were temporarily stable, and the lifting of environmental protection restrictions had boosted steel mill production, which was conducive to the release of iron ore demand, leading to a slight increase in steel mill demand in the short term. On the supply side, overseas shipments fluctuated cyclically last week, and port inventories had continued to accumulate. However, overseas shipments may increase next week. Combined with high port inventories, supply is strengthening, and the fundamentals of iron ore supply and demand are likely to maintain a situation of both supply and demand growth. Last week, the major markets were affected by news of a significant reduction in overseas shipments, driving a rebound in iron ore prices. Despite high iron ore port inventories and an expected increase in shipments in the short term, steel mills are actively resuming production, and iron ore prices are expected to rise slightly next week, with a trend of strengthening and fluctuation. Later in the week, attention should be paid to steel mill profits and actual demand from downstream finished products.

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