Price trend

Since September, the iron ore market first fluctuated upward, then rose and fell, and the overall trend was stronger and volatile. According to the iron ore price tracking data of SunSirs, as of the 29th, the SunSirs Price Index was 798.67 points, up 2.29% month-on-month. Among them, it reached the highest point of the month on the 22nd at 819 points, with an increase of 4.9%, as shown in the figure above.

Looking back at the iron ore market in September, 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 early and mid-September, as the industry entered the traditional peak season, the terminal operation situation improved. In addition, 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 pushing up iron ore prices. In addition, the market was affected by the "anti-involution" news, speculative trading sentiment was positive, and the resonance of terms drove up the spot iron ore price, so the ore price showed a volatile upward trend.

Secondly, the market experienced a surge and then a decline. By mid-to-late September, with no further action in the anti-involution campaign, finished product sales fell short of expectations, and overseas iron ore shipments returned to normal. Coupled with the increased risk of a Fed rate cut and the negative impact of tariffs on building materials, the iron ore market began to gradually decline. As a result, the overall market trend in September showed a surge and then a decline, with a relatively stronger and volatile trend.

Analysis review

As of September 26, imported iron ore inventories at 45 ports nationwide stood at 140.0028 million tons, a weekly increase of 1.992 million tons and a monthly increase of 2.3726 million tons. Daily port throughput was 3.364 million tons, a weekly decrease of 27,700 tons and a monthly increase of 17.76 tons. The number of vessels at port was 99, down 2 from the end of August. Total imported iron ore inventories at steel mills nationwide stood at 97.3639 million tons, a monthly increase of 7.292 million tons. Since September, steel mills have maintained healthy profits and active production, leading to a continued increase in steel mill delivery demand, resulting in a monthly increase in daily port throughput. Despite the continued depletion of steel mill inventories, overseas shipments have resumed since September, halting the decline in port inventories. As of September 29,  the subsequent steel market situation still depended on the downstream steel transaction situation. If the steel market can still grow in October, the resilience of steel mills' iron ore demand can be expected, and the iron ore port inventory may continue to decline.

On the supply side, as of September 29th, global iron ore shipments totaled 34.754 million tons, a month-on-month increase of 1.596 million tons. Total iron ore shipments from 19 ports in Australia and Brazil reached 28.64 million tons, a month-on-month increase of 1.036 million tons. Australia shipped 20.28 million tons, an increase of 832,000 tons. Of this, Australia shipped 17.714 million tons to China, a month-on-month increase of 542,000 tons. Brazil shipped 8.361 million tons, a month-on-month increase of 205,000 tons. Due to seasonal factors, overseas shipments began to recover in September. Combined with the relatively good iron ore market in September and strong overseas shipment activity, port arrivals are expected to remain high in October, especially as the weather improves. Overall supply is expected to remain relaxed in October.

On the demand side, steel mill blast furnace operations remained stable at a high level in September, primarily due to healthy profits and strong production enthusiasm, which kept hot metal production high. However, market pessimism emerged in September due to weaker-than-expected downstream steel product releases. In the short term, steel mill profits can still support current production levels. Starting in October, due to high supply in September and pre-holiday inventory replenishment, steel mills will be unable to restock their inventory, which will be bearish for iron ore demand. Downstream steel procurement is expected to remain stagnant, leading to a projected decline in iron ore demand in October. However, the specific situation will depend on steel mill profits and downstream steel transaction conditions. Iron ore demand may decline slightly in early October.

Regarding scrap steel, prices have initially risen and then stabilized since September, trending higher. This was primarily driven by the overall upward trend in ferrous metals, which in turn impacted scrap price fluctuations. Steel mill profits have remained healthy since September, with mills operating at high levels and blast furnaces continuing to resume production. Furthermore, the continued impact of the "anti-involution" policy during September has been positive for the scrap steel market. However, pressure on finished steel prices has negatively impacted steel profits, leading to a slight decline in the scrap steel market in October.

Market outlook

In summary, data analysts of SunSirs believe that on the demand side, steel mill profits maintained good in September, with blast furnaces largely resuming production and hot metal production remaining high. However, due to pressure on finished product production, steel mill profits were declining, leading to a projected decline in terminal demand in October, negatively impacting hot metal demand. On the supply side, seasonal factors impacted October, with overseas shipments resuming and overall port inventories increasing. Overseas shipments performed well in September, and overall supply remained strong. Although the steel market entered its traditional peak season in September, terminal production operations recovered somewhat, but the recovery was less than market expectations, cooling market sentiment. Overall, the iron ore supply and demand fundamentals are likely to shift to a strong supply and weak demand situation in October, potentially leading to significant negative market feedback. Iron ore prices are expected to decline slightly in early October, with a weakening and volatile trend.

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