In the first ten days of July, the demand performance was dismal, the loss range of the steel plant was expanded, and the production was actively reduced. The output of molten iron dropped significantly within the month, and the iron ore price fell; After entering the late ten days, the finished product table needs to recover. With the improvement of the profit of the steel plant, the ore price has stopped falling and rebounded. Generally speaking, the iron ore market in July showed a V-shaped trend as a whole, and experienced a process of first falling and then rising.
Supply of imported iron ore
China's iron ore supply is mainly dependent on maritime import, which is prone to supply shock. At present, the situation of iron ore supply is relatively surplus: Australia's shipments fall seasonally, Brazil's shipments are relatively healthy, North China's arrivals drop sharply, and port stocks are accumulated. As of August 8, the iron ore inventory of Chinese ports (33 coastal ports) was 127.0988 million tons, an increase of 0.99% over August 1. The port inventory of imported iron ore has risen for six consecutive weeks.
According to the latest data, the port inventory rebounded for four consecutive weeks, and the recovery speed was accelerated, showing the characteristics of relative surplus. From the perspective of causes, the quantity of arrivals from the supply side is still declining, and it has reached a new historical low. Even with the rapid decline of the arrival volume, the port inventory continues to accumulate, which reflects that China's demand for iron ore is still poor from the perspective of supply. However, it is expected that the trend of iron ore accumulation will slow down under the recovery of steel mill profits.
Demand for terminal steel
In the first ten days of July, the finished product table needs to show obvious off-season characteristics, and the rebound space of the iron ore price in the later City largely depends on the recovery of the end consumption demand.
According to the National Bureau of statistics, the business activity index of the construction industry was 59.2%, 2.6 percentage points higher than that of the previous month. The production activity of the construction industry has accelerated, indicating that the construction of infrastructure projects has accelerated, the market demand has rebounded, the employment of enterprises continues to increase, and the industry is expected to maintain stable growth. The government's promotion of infrastructure projects may, to a certain extent, dispel the pessimistic expectation of the consumption of finished products in the peak season.
According to wind data, the profitability of 247 steel mills this week was 41.99%, up 22.9% month on month. The restoration of the steel plant's profits triggered the market's expectation of the steel plant's resumption of production. However, from the actual operation situation, the resumption of production of the steel plant is limited at this stage, the consumption of terminal iron ore is low, and the average daily output of molten iron remains low, slightly rising to 2143100 tons
To sum up, the high-frequency indicators still show that the terminal demand of iron ore is weak, the demand for resumption of production has not been fully released, and the rebound space of iron ore is limited. It is expected to maintain a wide range of fluctuations in the short term.
