Market Trends

According to the commodity market analysis system of SunSirs, iron ore prices trended upward with some volatility last week (April 11–18; the same period applies hereinafter), exhibiting a strengthening trajectory. As of the 18th, the SunSirs Iron Ore Price Index stood at 788.78 points, marking a month-on-month increase of 2.28%, as illustrated in the chart above. Last week, the iron ore market followed a pattern of initial decline followed by a rebound, displaying a volatile yet strengthening trend in which the overall price level shifted upward compared to the previous week. In terms of market dynamics, prices remained weak during the first half of the week, weighed down by bearish sentiment surrounding long-term contract negotiations; however, starting Tuesday (April 14), prices entered a recovery phase as the negative impact of the negotiations dissipated and fundamental market support strengthened.

Fundamental Analysis

Regarding inventory: as of April 17, the total inventory of imported iron ore across 45 ports nationwide stood at 169.8045 million tons, a decrease of 805,000 tons from the previous period. The daily average port throughput (outbound volume) was 3.1462 million tons, an increase of 26,300 tons week-on-week; the number of vessels currently at port totaled 106, an increase of 2 vessels week-on-week. The aggregate inventory of imported iron ore held by steel mills nationwide amounted to 89.3237 million tons, an increase of 375,300 tons week-on-week. Last week, as steel mill profit margins declined, the combined factors of increased hot metal production and the release of demand for material pickup sustained the upward trend in port throughput. Port inventories continued to undergo destocking last week, and this destocking trend is expected to persist into the coming week; consequently, close attention should continue to be paid to changes in port-side iron ore inventory levels over the next week.

On the supply side, as of April 13, the total global volume of iron ore shipments for the previous week stood at 31.862 million tons—an increase of 844,000 tons week-on-week. Shipments from Australia and Brazil combined totaled 26.844 million tons, up 2.335 million tons from the previous week. Australian shipments reached 19.148 million tons—an increase of 1.75 million tons—of which 14.971 million tons were destined for China, representing a week-on-week rise of 76,000 tons. Brazilian shipments totaled 7.666 million tons, an increase of 584,000 tons. Thus, both Australian and Brazilian shipment volumes saw increases last week. While cyclical fluctuations in overseas shipments from Australia and Brazil are primarily influenced by seasonal factors and weather conditions—leading to short-term variations in shipment volumes—the medium-to-long-term outlook suggests that the iron ore supply landscape will remain relatively loose. With the resumption of industrial operations following the Lunar New Year holidays and the active shipping efforts of overseas suppliers, both iron ore shipment volumes and port arrivals are expected to rebound next week; consequently, the overall iron ore supply situation is trending toward a strengthening trajectory.

Regarding demand, as of April 17, the operating rate of steel mills' blast furnaces stood at 83.2%, remaining flat week-on-week. The capacity utilization rate for blast furnace ironmaking reached 89.78%, an increase of 0.04% from the previous week. The profitability rate among steel mills was 47.62%, a decline of 0.43% week-on-week. The average daily output of molten iron was 2.395 million tons, an increase of 1,200 tons from the previous week. Currently, the average daily consumption of imported iron ore among the sampled steel mills stands at 2.9629 million tons, an increase of 11,000 tons from the previous week. Last week, steel mill operations remained at high levels and molten iron output increased; however, steel mill profitability trended downward. The coming week marks the final full trading week prior to the "May Day" holiday; consequently, steel mills' demand for inventory replenishment is expected to be released in a concentrated manner, suggesting that demand for iron ore may see a slight uptick next week.

Regarding scrap steel, the domestic market last week (April 11–18) generally exhibited a trend of narrow fluctuations and slight downward movement. The East and North China regions also displayed weakness; while scrap steel arrivals at steel mills in Jiangsu remained stable, prices faced downward pressure. In the Guangxi region, market purchasing and sales rhythms were disrupted by the "March 3" holiday, resulting in overall narrow fluctuations.

The scrap steel market is expected to continue its trend of narrow fluctuations and a generally weak performance next week. While pre-holiday restocking demand is likely to provide short-term support, upside potential for prices remains limited against a fundamental backdrop characterized by a lack of cost-effectiveness in scrap steel, pressure on steel mill profit margins, and a moderate increase in inventories. Prices are projected to follow a "stable-first, then-weak" trajectory: the first half of the week should remain relatively stable, bolstered by restocking expectations; however, in the latter half—as restocking activities wind down and the market shifts back to fundamentals-driven dynamics—prices may face slight downward pressure.

Market outlook

In summary, analysts at SunSirs anticipate that iron ore prices next week will exhibit a volatile, sideways trend as the market awaits a clear direction. On the supply side, increased shipments and a rebound in port arrivals are exerting some downward pressure; however, continued growth in hot metal production and persistent inventory drawdown at ports are providing underlying support. The market's primary focus centers on spot trading activity related to pre-holiday restocking—a critical variable that holds the key to disrupting the current equilibrium. Should restocking volumes surge and create a synergistic effect, prices are likely to trend upward; conversely, the market will continue to fluctuate within its current trading range.

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