SunSirs: Supply and Demand both Increase, Iron Ore may Continue to Rise this Week

According to the commodity market analysis system of SunSirs, the price of iron ore rose first and then fell last week, and fluctuated in a narrow range.

Last week, the price of iron ore rose first and then fell, and fluctuated in a strong trend. The main reason is that the macro situation has improved, overseas sentiment has eased, and the reduction in tariffs is beneficial to exports, thereby driving up the price of iron ore; at the same time, steel mills are mainly based on rigid demand, and the profit situation of steel mills is good, so the purchasing enthusiasm is good, which supports the growth of daily average molten iron output. However, the high level of molten iron output may decline, and the sustainability of finished product exports also needs to be watched. Therefore, the price of iron ore rose first and then fell last week, and fluctuated in a strong trend.

Forecast of the trend of ore prices this week:

In terms of inventory, as of May 16, the inventory of imported iron ore in 45 ports across the country was 141.6609 million tons, a decrease of 726,200 tons from the previous month; the average daily port clearance volume was 3.2389 million tons, an increase of 86,800 tons from the previous week; the number of ships in the port was 86, an increase of 2 from the previous week. The port inventory of iron ore this week is as shown above; the total inventory of imported iron ore in steel mills across the country is 89.6116 million tons, an increase of 2.18 tons from the previous week.

This week, the demand for replenishment purchases by steel mills continued to be released, so the port clearance volume increased. In addition, the profits of steel mills improved and the production enthusiasm was high. Steel mills are likely to maintain the current production situation next week. However, the number of ships arriving at the port increased this week, and the port inventory may accumulate next week. We still need to pay more attention to the changes in port iron ore inventory next week.

In terms of supply, as of May 12, the total global iron ore shipments last week were 30.29 million tons, a decrease of 215,000 tons from the previous month; the total iron ore shipments from 19 ports in Australia and Brazil were 24.225 million tons, a decrease of 1.179 million tons from the previous month. Australia's shipments were 17.972 million tons, an increase of 280,000 tons from the previous month, of which Australia's shipments to China were 15.938 million tons, an increase of 754,000 tons from the previous month. Brazil's shipments were 6.252 million tons, a decrease of 1.46 million tons from the previous month.

This week, Australia's shipments increased slightly, while Brazil's shipments decreased slightly. The cyclical changes in overseas shipments from Australia and Brazil are mainly affected by seasons and weather. Short-term shipments have changed. In the medium and long term, the loose supply of iron ore has not changed. Iron ore shipments will rebound next week, and the supply of iron ore is expected to increase next week.

In terms of demand, as of May 16, the blast furnace operating rate of steel mills was 84.15%, a decrease of 0.47% from the previous week; the blast furnace ironmaking capacity utilization rate was 91.76%, a decrease of 0.33% from the previous week; the profit rate of steel mills was 59.31%, an increase of 0.44% from the previous week; the average daily molten iron output was 2.4477 million tons, a decrease of 8,700 tons from the previous week; the current daily consumption of imported ore in the sample steel mills was 3.0291 million tons, a decrease of 9,900 tons from the previous week.

Last week, the operation of steel mills continued to run at a high level, and the enthusiasm for operation was high. At present, the profits of steel mills continue to improve, the scale of steel mill operations is stable, and the resumption of production is active. This week, the output of molten iron is expected to decrease, and the demand for iron ore will increase slightly.

In summary, the data analyst of SunSirs believes that on the demand side, the profit situation of steel mills is improving, and the current scale of operation will continue to be maintained. Some steel mills will resume production this week, and the overall demand situation is expected to increase; on the supply side, overseas shipments changed cyclically last week, and port inventories continued to be destocked. Overseas shipments will improve this week, and the supply will increase overall. The fundamentals of iron ore supply and demand may turn to a situation of double increase in supply and demand.

At this stage, the weather continues to improve, and the terminal operation is good. Last week, it was mainly affected by overseas macro factors and the active futures market, which led to a strong ore price. It is expected that this week, affected by the fundamentals, iron ore may rise first and then fall, and maintain a strong and volatile operation. In the later period, attention should be paid to the profit situation of steel mills and the actual demand of the downstream of finished products.

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