Price trend:
According to the SunSirs' commodity market analysis system, iron ore prices fluctuated upwards last week (November 22-29). As of the 29th, the SunSirs iron ore price index was 811 points, up 0.45% week-on-week, as shown in the chart above. The main reason for the upward trend in iron ore prices last week was the market's pattern of rising and then falling. At the beginning of the week, the strong price of medium-grade ore drove the market upwards. Subsequently, the annual maintenance plan for steel mill blast furnaces was implemented, leading to a continued decline in pig iron production. Port inventories accumulated to 159 million tons, highlighting the contradiction between increased supply and decreased demand, putting downward pressure on prices and widening the trading range. Although macro policies to promote consumption and regulate price order were introduced during the week, their impact on the ferrous metals sector was limited. The main trading theme remained focused on weak demand, with the market maintaining a narrow range of fluctuations overall.
Market Analysis
Regarding inventory, as of November 28th, the total imported iron ore inventory at 45 ports nationwide was 152.1012 million tons, an increase of 1.5547 million tons week-on-week; the average daily port throughput was 3.3058 million tons, an increase of 6,600 tons week-on-week; and the number of ships in port was 115, a decrease of 8 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 89.4248 million tons, a decrease of 587,500 tons week-on-week. The continued decline in steel mill profits last week further limited demand for deliveries, resulting in little change in port throughput. Last week's port inventory showed a sharp increase rather than a decrease, coupled with increased overseas shipments keeping port inventories high. Next week, close attention should be paid to changes in port iron ore inventories.
On the supply side, as of November 24th, global iron ore shipments totaled 32.784 million tons last week, a decrease of 2.38 million tons week-on-week; shipments from Australia and Brazil totaled 26.374 million tons, a decrease of 2.713 million tons week-on-week. Australian shipments totaled 18.396 million tons, a decrease of 2.109 million tons week-on-week, of which 15.536 million tons were shipped to China, a decrease of 3.194 million tons week-on-week. Brazilian shipments totaled 7.978 million tons, a decrease of 0.604 million tons week-on-week. Shipments from both Australia and Brazil decreased last week. The cyclical changes in overseas shipments from Australia and Brazil were mainly affected by seasons and weather. While short-term shipments fluctuated, the medium- to long-term iron ore supply situation remained loose. The industry will be in its off-season until the end of the year, but traders' willingness to ship is strong. Next week, both iron ore shipments and arrivals will decline, but the overall iron ore supply situation will remain strong.
On the demand side, as of November 28, the blast furnace operating rate of steel mills was 81.09%, a decrease of 1.1% week-on-week; the blast furnace ironmaking capacity utilization rate was 87.98%, a decrease of 0.6% week-on-week; the steel mill profit margin was 35.06%, a decrease of 2.6% week-on-week; the average daily pig iron output was 2.3468 million tons, a decrease of 16,000 tons week-on-week; and the daily consumption of imported iron ore at sample steel mills was 2.8943 million tons, a decrease of 22,500 tons week-on-week. Last 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 steel mills may resume production next week, due to lower-than-expected finished steel transactions, steel mill profits may further decline, negatively impacting steel mill demand. It is expected that iron ore demand will slightly decrease 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 Forecast:
In summary, analysts at SunSirs believe the iron ore market is expected to continue its volatile trend next week. On the supply side, both global shipments and arrivals had declined slightly compared to the previous week; on the demand side, national pig iron production is expected to continue to decline, and the overall supply-demand imbalance is unlikely to change; meanwhile, port inventories continued to accumulate. With these mixed factors and a lack of clear directional drivers, iron ore prices are expected to remain volatile. In the future, attention should be paid to steel mill profitability and the actual demand from downstream finished steel products.
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