The demand for replenishment of steel mills before the holiday continues to be released, and medium and high-grade mines are once again sought after
Although downstream steel mills have experienced continuous replenishment in the early stage, due to the recent increase in daily consumption of iron ore, the imported sintering inventory and available days in some regions are still low, especially the current iron ore inventory of some steel mills in Shandong There are still gaps. Driven by rigid demand, steel mills still have strong replenishment efforts after New Year's Day. Due to the early port closure in Hebei, this round of replenishment was opened late, so the willingness to replenish the replenishment in the near future is also obvious.
In addition to the recent Spring Festival approaching, the impetus for steel mills to replenish their warehouses also comes to a certain extent from the continued strong demand for iron ore. Although the output of finished products has fallen recently, it is mainly due to the severe reduction in profits of electric furnace steel plants and some companies approaching the Spring Festival. The occurrence of early holidays has led to a continuous decline in its production and operating rate. While the long process is still profitable, the operating rate of the blast furnace and the average daily molten iron output also continue to remain high, but the daily consumption of iron ore has increased slightly. The current daily average port volume continues to remain at a high level of more than 3 million tons, and the port spot transaction volume has once again risen to a historical high of more than 2.4 million tons. It is expected that the replenishment of steel mills before the holiday will continue. Traders’ confidence is relatively strong, and some traders even appear to be reluctant to sell. Spot prices are likely to rise but never fall in the short term.
The current long-process steel mills are profitable, and their recent purchases of iron ore have again favored medium- and high-grade ore. Judging from the recent trend of various varieties, the premium of medium- and high-grade ore compared with low-grade ore has clearly strengthened. Brazilian powder represented by card powder and Pakistani powder have the most obvious increase. This is mainly related to the recent decline in shipments and arrivals of VALE, and its subsequent shipment capacity is still doubtful, making current traders more resolute in the price of Brazilian mines, especially Pakistan due to its high price-performance ratio in the early stage. , The downstream procurement volume has seen a significant increase in the near future, and the price increase is among the top. PB powder stocks have also begun to deplete recently, and prices have also increased significantly. The recurrence of the mid-to-high-grade mine market has on the other hand boosted the recent strength of the disk.
Shipment of foreign mines continued to decline, and port inventory declined
Recently, the shipment volume of foreign mines has continued to decline. The total shipment volume of Brazil and Australia in the most recent period has fallen to 20.086 million tons. This value is currently close to the low value of the shipment volume when the Australian mine was overhauled at the end of October last year. Considering that Australia has already entered the hurricane season, Blake, the first tropical cyclone in Western Australia this year, is currently located over the waters north of Broome and is expected to cause strong winds on the northwest coast of Kimberley soon. , Its subsequent shipment volume may continue to be disturbed.
Due to the extension of its domestic mixing cycle, the Brazilian mine's recent shipment volume has continued to be sluggish, further aggravating the market's concerns about its shipping capacity in the first quarter.
On the demand side, the recent steel mills’ efforts to replenish the inventory are still acceptable, and the port volume has continued to be high, causing the port inventory to drop recently. In general, the expectation of low shipments in the first quarter of foreign mines is difficult to shake in the short term, and this logic will continue to support the iron ore 05 contract price.
Macroeconomics is expected to pick up, geopolitics are heating up
The domestic macro economy is expected to pick up in the near future, and the manufacturing PMI continues to remain above the line of prosperity and decline. The news of the central bank's RRR cut during the New Year's Day has boosted the short-term market sentiment of the black department. As a highly internationalized species, iron ore is currently being affected by the renewed geopolitics in the Middle East. The recent increase in domestic and international oil prices will increase the subsequent shipping costs of iron ore and support its subsequent arrival spot prices.
In general, the supply and demand of iron ore has shown a gradual strengthening trend recently, and spot prices still have a small upward space. The 05 contract is supported by expectations that the shipment of foreign mines in the first quarter will decline and terminal demand will remain resilient. The short-term price will remain firm, while the current price of the far-month 09 contract is relatively high, taking into account the macroscopic optimistic expectations in the first quarter and the short-term geopolitical upgrade. For the increase in ocean freight, there is a need for further expansion of the 05-09 spread. At the current time, you can try to lay out 05 long and short 09, or you can build a bull market spread option on the 05 contract and buy I-2005-C-670. Sold I-2005-C-690. (Author's unit: Founder Interim Futures)