Price trend:

According to data from the SunSirs' commodity market analysis system, iron ore prices fluctuated upwards last week (November 16-23), trending stronger. As of the 23rd, the SunSirs' iron ore price index was 807.33 points, up 0.92% week-on-week, as shown in the chart above. Last week, iron ore prices continued to decline and weaken, mainly because the logic of the ferrous metals market returned to industry fundamentals. Last week, the ferrous metals market showed a differentiated pattern: iron ore prices fluctuated within a range due to the interplay between macroeconomic expectations and fundamentals; steel prices remained relatively firm due to resilient demand and accelerated destocking, with the overall market showing a strengthening trend.

Market Analysis

Regarding inventory, as of November 21, the total imported iron ore inventory at 45 ports nationwide was 150.5465 million tons, a decrease of 750,600 tons week-on-week; the average daily port throughput was 3.2992 million tons, an increase of 29,700 tons week-on-week; and the number of ships in port was 123, an increase of 6 week-on-week. The port inventory situation for iron ore last week was shown in the chart above. The total imported iron ore inventory at steel mills nationwide was 90.0123 million tons, a decrease of 747,800 tons week-on-week. The continued decline in steel mill profits last week further suppressed demand for delivery, so the port throughput remained relatively stable. While port inventory began to decrease last week, increased overseas shipments kept port inventory at high levels. Next week, close attention should be paid to changes in port iron ore inventory.

On the supply side, as of November 17th, global iron ore shipments totaled 35.164 million tons last week, an increase of 4.474 million tons week-on-week; shipments from Australia and Brazil totaled 29.087 million tons, an increase of 3.601 million tons week-on-week. Australian shipments reached 20.504 million tons, an increase of 2.396 million tons week-on-week, of which 18.73 million tons were shipped to China, an increase of 3.39 million tons week-on-week. Brazilian shipments reached 8.582 million tons, an increase of 1.205 million tons week-on-week. Shipments from both Australia and Brazil increased last week. The cyclical changes in overseas shipments from Australia and Brazil were mainly affected by seasons and weather. While short-term shipments may fluctuate, the medium- to long-term iron ore supply situation remains loose. The industry will be in a low season until the end of the year, but traders have a strong willingness to ship. Next week, iron ore shipments may decline slightly, but arrivals will increase, and the iron ore supply situation is expected to strengthen next week.

On the demand side, as of November 21, the blast furnace operating rate of steel mills was 82.19%, a decrease of 0.62% week-on-week; the blast furnace ironmaking capacity utilization rate was 88.58%, a decrease of 0.22% week-on-week; the steel mill profit margin was 37.66%, a decrease of 1.3% week-on-week; the average daily pig iron output was 2.3628 million tons, a decrease of 6,000 tons week-on-week; and the current daily consumption of imported iron ore at sample steel mills was 2.9168 million tons, a decrease of 9,500 tons week-on-week. This week, the operating rate of steel mills remained relatively stable, but the pressure on finished steel prices led to a further decline in steel mill profits due to increased production. Weak production enthusiasm among steel mills resulted in a decrease in pig iron output. Although more steel mills are expected to resume production next week, lower-than-expected finished steel transactions may further reduce steel mill profits, negatively impacting demand. It is anticipated that iron ore demand may decrease slightly next week.

Regarding scrap steel, prices declined slightly and trended weaker last week. This was mainly due to weak demand for finished steel products. Pressure on finished steel prices led to lower steel mill profits and reduced mill operating rates, which in turn hampered the release of scrap steel demand. Consequently, scrap steel prices also declined, with some adjustments in certain regions. The scrap steel market is expected to continue its weak trend next week.

Market Outlook:

In summary, analysts at SunSirs believe the iron ore market is expected to experience a volatile trading pattern with increased amplitude. Fundamental drivers are diverging: on the supply side, continued increases in port arrivals and further accumulation of port inventories are putting upward pressure on prices; however, on the demand side, relatively stable pig iron production is providing a floor for ore prices. With these mixed factors, the market lacks clear direction, but volatility is likely to increase significantly. Going forward, attention should be paid to steel mill profitability and actual downstream demand for finished steel products.

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