The main contract of iron ore futures fell by the daily limit on Tuesday. The relevant departments said that they are highly concerned about the changes in iron ore prices and will take further effective measures to maintain the normal order of the market. Regulators said iron ore prices fell significantly after a crackdown on speculation.
In view of the recent abnormal fluctuations in iron ore prices, the Price Supervision and Competition Bureau of the General Administration of Market Supervision, the Price Division of the Development and Reform Commission, and the Futures Department of the CSRC recently held a joint meeting to understand in detail the changes in port inventories of iron ore trading enterprises and their participation in spot transactions during the iron ore period.
The relevant departments cautioned and warned relevant enterprises not to fabricate and publish false price information, not to maliciously hype, hoard, or bid up prices, and called on relevant state-owned enterprises to take the initiative to assume social responsibility to help the government guarantee supply and stabilize prices.
Port inventory is high, and it is expected to decline gradually in the follow-up.
Market participants said that the current round of iron ore prices continue to rise in the process, downstream demand has not improved significantly. Since December last year, the average daily output of hot metal has been much lower than that of the same period in previous years. After the iron ore price reaches 150 US dollars / ton, it obviously deviates greatly from the fundamentals of supply and demand.
In addition, the current port iron ore inventory is still high, as of February 11, 45 port imported iron ore inventory increased by 1.6364 million tons to 150 million tons. Due to the impact of the Spring Festival holiday, the replenishment of steel mills has decreased and port inventory has accumulated. In the later period, port inventory is expected to decline at a rate of 10 million tons per month until it falls back to the level of about 120 million tons.
From the perspective of supply and demand, there is no obvious gap between supply and demand in the current iron ore market; from the perspective of valuation, the current iron ore price is still much higher than the mainstream mine cost, which is suspected of overvaluation.
Citic Futures Black Building Materials Group pointed out that the current northern steel mills are constrained by production restrictions, the actual demand for iron ore is significantly suppressed, and port inventories continue to accumulate. With the implementation of the "double carbon" policy, the increase in overseas mine supply and the decline in terminal demand, the pressure above iron ore prices will also increase.
Citic Construction Investment Futures Industrial products team told the Financial Union that iron ore supply is OK, inventory is high, demand is significantly lower than in previous years, supply and demand fundamental deviation at this stage. Recently, iron ore prices are facing very great downward pressure.
Regulatory authorities plan to introduce measures to curb speculation in mineral prices
Recently, the relevant departments have continuously stated that they will crack down on the operation of the iron ore market. According to market participants, follow-up regulators may introduce measures to curb speculation in iron ore prices, including policies such as reducing the dumping of iron ore traders.
In addition, the Price Department of the National Development and Reform Commission and the Price Supervision and Competition Bureau of the General Administration of Market Supervision plan to send a joint research team to some commodity exchanges and key ports to carry out supervision and research on the iron ore market. In the next step, the relevant departments will pay close attention to the changes in market prices and severely crack down on illegal acts such as fabricating and spreading price increase information, hoarding and hoarding, and driving up prices.
