Since mid-may, spot prices of iron ore have deteriorated simultaneously. The main contract fell in the vicinity of the high point of $826. 5 per ton to $790 per ton, a cumulative decline of 4. 17 per cent. Cash prices have also fallen: 61 per cent of the cfr price index is updated at $107. 25 per ton, down $5. 1 per ton from the previous period's high; and prices for mainstream spot varieties in qingxi island have dropped by $21-43 per ton over the same period。
Optimism cooled
In mid-may, the whole of the black metal plate fell. The reason for this is, on the one hand, a gradual decline in market optimism in the preceding period and an adjustment in the size of black-system main contract varieties, with a fall in the participation of steel futures markets; and, on the other hand, a weakening of demand in the downstream in may, during the transition from the traditional consumption season to the down season, while the supply of upstream raw materials remained high and the supply and demand patterns in the industry weakened, slowing down the overall movement of black metals。
It is worth mentioning that the price of iron ore has risen and fallen, driven by high shipping freight and rigid demand downstream. The fact that the current cortex ratio and the catheter ratio continue to operate at low levels during the year also confirms the high overall valuation of iron ore。
Limited increase in demand
The current demand for iron ore markets is good, but the incremental space is limited. Ore terminal consumption is high when steel plants are active. As of the week of 15 may, the average daily production and import of iron water at 247 steel plants in the federation was 2. 3933 million tons and 2. 94. 5 million tons, respectively, both of which were high during the year. At the same time, there has been a significant improvement in the profitability of steel plants, with the federation accounting for 64. 07 per cent of the most recent of 247 steel plants, a cumulative increase of 25. 97 percentage points over the earlier period。
While the current overall profitability of steel plants is positive and the iron ore needs to be supported, industrial contradictions within the light-season steel market tend to accumulate and there is relatively limited room for upward improvement. The pressure on the supply of mainstream steel varieties is generally manageable during the season period, and the trend towards the de-mining of stocks continues. In april, however, the decline in real estate investment further increased, with the number of housing construction areas and new construction areas falling by 48. 8 per cent and 27. 1 per cent, respectively, and the demand for steel for construction materials was significantly weaker. At the same time, strong steel exports have not been effective in bringing domestic manufacturing steel back to warm, and manufacturing investment grew at a similar rate in april。
Taken together, the two core downstream industries of steel are weak, demand is expected to continue to weaken in the off-season season, and internal tensions within the industry have accumulated, making it difficult to boost large-scale production of steel plants, and additional space for subsequent iron ore demand is limited。
High supply
High levels of inventory continued. The current stock of iron ore in 47 ports in the country amounts to 172 million tons, an increase of 2. 442 million tons over the same period, and the total stock of entire industrial chains increased by 10. 05 per cent over the same period last year。
The overall market supply tends to be relaxed. High mineral prices have continued to boost export incentives in overseas mines, and the increase in non-mainstream mineral deliveries has been particularly impressive. As of the week of 17 may, the global volume of iron ore shipments stood at 325. 47 million tons, an increase of 3. 46. 3 million tons. Accumulated global iron ore shipments during the year increased by 2,823 million tons over the same period last year, while non-mainstream mineral deliveries increased by more than 24 million tons, which has become a major force for market supply growth。
It is a matter of concern that the west mandu project continues to speed up the pace of its delivery, which has approached millions of tons in the recent past. If this scale of shipment is maintained, the overall supply of iron ore during the year is expected to be either on a scale or in a supermarket. The data show an average price of us$ 110. 22 per ton for pure ore in may. Incentived by high prices, the willingness to export minerals overseas has increased significantly, with a concentration near the end of the fiscal year, and the supply of post-market iron ore is expected to remain high。
In summary, macro-expected adjustments resonate with weak industrial fundamentals, with iron ore prices falling from the top. In the post-market outlook, where demand continues to decline downstream, the volume of stacked shipments remains high and iron ore prices lacked mobility, the market will continue to swerve back。
(author: futures of the city)
