Price trend

According to the SunSirs Commodity Market Analysis System, iron ore prices rose before falling last week (September 13-21, the same below), fluctuating within a narrow range. As of the 21st, the SunSirs Iron Ore Price Index was 814 points, up 0.74% month-on-month, as shown in the chart above. This week's decline followed by a slight rise in iron ore prices was primarily due to the impact of international macroeconomic news at the beginning of the week, which drove up ferrous metal prices and fueled strong market sentiment. In the second half of the week, as sentiment cooled and the market returned to its industrial logic, rising iron ore prices led to declining steel mill profits, potentially impacting production operations. Consequently, iron ore prices rose before falling, fluctuating within a narrow range last week.

Analysis review

As of September 18th, imported iron ore inventories at 45 ports nationwide stood at 138.01 million tons, up 483,900 tons from the previous week. Daily port throughput was 3.39 million tons, a 78,900-ton increase from the previous week. The number of vessels at port was 101, up one vessel from the previous week. Total imported iron ore inventories at steel mills nationwide stood at 93.09 million tons, a 3.16 million-ton increase from the previous week. Last week's increase in port throughput stemmed from increased steel mill operating rates, which led to a recovery in demand for delivery. Last week's increase in overseas shipments and the increase in port vessels is likely due to the approaching holiday, which is expected to lead to increased pre-holiday restocking demand. Port inventories are likely to continue to decline, so it still need to pay more attention to changes in iron ore inventories at ports next week.

On the supply side, as of September 15th, global iron ore shipments totaled 35.731 million tons last week, an increase of 8.169 million tons from the previous month. Total iron ore shipments from Australia and Brazil reached 29.778 million tons, a 6.482 million ton increase from the previous month. Australian shipments totaled 20.846 million tons, a 2.622 million ton increase from the previous month. Of this, 18.362 million tons were shipped to China, a 3.049 million ton increase from the previous month. Brazilian shipments totaled 8.932 million tons, a 3.86 million ton increase from the previous month. Shipments from Australia and Brazil significantly recovered last week. Overseas shipments from Australia and Brazil fluctuate 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. With the traditional peak season approaching, traders were eager to ship. Iron ore shipments are likely to remain high next week, and a slight increase in iron ore supply is expected.

On the demand side, as of September 18, the blast furnace operating rate at steel mills was 83.98%, a 0.15% increase from the previous week. The blast furnace ironmaking capacity utilization rate was 90.35%, a 0.17% increase from the previous week. The profitability of steel mills was 58.87%, a 1.3% decrease from the previous week. The average daily molten iron output was 2.4102 million tons, a 4,700-ton increase from the previous week. The daily consumption of imported ore at the sample steel mills was 2.9745 million tons, a 8,000-ton increase from the previous week. Last week, steel mill operating rates increased, while profits declined due to rising raw material prices. The resumption of production at more steel mills next week is expected to boost iron ore demand. Combined with the pre-holiday inventory replenishment demand, it is expected that iron ore demand will continue to grow next week.

Scrap prices saw a slight increase last week, with a strong trend. This trend was primarily driven by the overall ferrous metals market. Rising iron ore prices led to a decline in steel mill profits, while the lifting of environmental restrictions boosted production enthusiasm at steel mills, boosting demand for scrap. Consequently, scrap prices also saw some price adjustments in some regions, and the scrap market is expected to remain strong next week.

Market outlook

In summary, data analysts of SunSirs believe that on the demand side, declining steel mill profits and a positive short-term production readiness are positive for iron ore demand. Combined with pre-holiday restocking demand, this short-term steel mill demand release is expected to continue to grow. On the supply side, cyclical changes in overseas shipments last week led to a destocking of port inventories. However, overseas shipments are expected to remain high next week, and supply is expected to strengthen. Iron ore supply and demand fundamentals are likely to remain strong. Last week, major markets were influenced by overseas macroeconomic news, driving iron ore prices higher. Despite high iron ore port inventories and expected increases in shipments in the short term, steel mills are actively resuming production and anticipating increased pre-holiday restocking demand. Iron ore prices are expected to continue to rise and fluctuate next week. Later, attention should be paid to steel mill profits and actual demand from downstream finished products.

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