Since late November, the trend of ferrous metal varieties has diverged, among which the weakness of bifocal is fully evident, and the price is approaching the low point of the year in September. The same as the raw material iron ore price trend is strong, the main contract broke through the early shock platform along, since the low cumulative rise of 10.63%, Platts iron ore price index rose 9.97%, the current price has hit a new high in nearly two months.
Polyfactor fermentation
The major meeting is approaching and the PMI data at the beginning of the month is bright, the black metal market sentiment is picking up, and strong expectations are beginning to ferment, and steel and iron ore are driven by this. The actual trading weight of bifocal is too large, especially coking coal, and the original market hope of winter storage to support the upward logic of coal prices has been delayed. Independent coking plants and steel mills coking coal inventory replenishment is not active, the core reason is that coking coal supply is relatively loose, industrial contradictions are relatively obvious. To this end, under the logic of industrial chain strength hedging, investors will choose empty coal coke and multi-steel mines, of which high-elastic iron ore is more favored by the market, and the trend is relatively strong.
At the same time, multi-factor fermentation also boosted the current round of iron ore upward. First of all, the supply of iron ore has contracted recently, and the recent arrival volume of 47 domestic ports and the global iron ore shipment volume of 19 ports are weak. According to the shipping schedule, the short-term domestic arrival volume has not increased significantly, and under the influence of seasonal factors, the internal mine production has also weakened, and the high-frequency index has fallen for two consecutive weeks. Secondly, iron ore replenishment is relatively positive. In the past two weeks, iron ore inventory changes showed a decline in port inventory, steel mill inventory recovery trend, coupled with the high level of port iron ore depletion, the recent steel mill in iron ore replenishment, giving certain support to the mine price. Finally, since October, the offshore exchange rate of the US dollar against the RMB has been rising, and recently it has broken through 7.3, hitting a new high this year, while iron ore is priced in US dollars, and the US dollar will raise the internal price.
Limited fundamental improvement
The fundamentals of iron ore have not substantially improved, which is directly reflected in the fact that the total inventory has not been reduced. Recently, the total inventory of the whole industry chain still showed a slight accumulation trend, with a year-on-year increase of 15.24%. The pattern of high inventories has not changed and will still restrain the trend of iron ore.
At the same time, both ends of iron ore supply and demand have also ushered in changes, and iron ore demand has begun to fall from a high level. The average daily output of molten iron and daily consumption of imported ore from 247 sample steel mills of Steel Union fell for two consecutive weeks, with a cumulative decline of 20,700 tons and 31,200 tons, respectively. The profit of steel mills continues to shrink, and the proportion of profitable steel mills has declined for 6 consecutive weeks to 51.95%, and the cumulative decline is as high as 22.51%. Under the spot cost accounting, the northern long process steel mill has also fallen into a loss situation, and the subsequent production of steel mills is expected to continue to weaken.
In addition, the recent research report shows that 14 blast furnaces are scheduled to be repaired in December, involving a production capacity of about 62,000 tons/day; There are two blast furnaces planned to resume production, involving a capacity of about 17,500 tons/day. If the above shutdown and resumption plan is followed, the average daily output of molten iron in December will drop to 2.325 million tons, and if the subsequent steel winter storage or policy intensity is less than expected, it is not ruled out that the output of molten iron will drop to 2.3 million tons/world square.
It can be seen that the production of steel mills in the off-season is weakening, the core logic of supporting mine prices in the early stage is changing, and attention is paid to the subsequent decline in demand. What is relatively positive is that the recent overseas ore supply has contracted, the domestic iron ore arrival volume of 47 ports and the global iron ore shipment volume of 19 ports were 24.6850 million tons and 30.7910 million tons, respectively, both at a relatively low level, down 4.14% and 5.46% from the same period last year. However, it should be noted that near the end of the year, miners shipping storage impulse is expected, in the past two years in December shipments increased by 12.82%, 10.14%, it is expected that the current iron ore supply contraction is difficult to continue.
To sum up, major meetings are approaching, policy expectations are increasing, and short-term profit multi-factor fermentation supports the strong operation of mine prices. However, the demand for iron ore is weak, and the supply is limited, under the pattern of high inventories, the upward drive of iron ore is not strong, and the subsequent trend is not optimistic. (Author's unit: Baocheng Futures)