[SMM analysis] Iron ore sparse Hong Kong small rebound spot prices rose steadily

According to SMM Steel, iron ore stocks at 35 ports stood at 131.24 million tons as of January 4, up 760000 tons from 130.48 million tons last week. The average daily dredging capacity increased by 60, 000 tons to 2.441 million tons over the previous week, and the overall sparse port level rebounded slightly as steel mills began to replenish their warehouses before the festival.

[weekly Price Review]

After New Year's Day, even iron concussion upward; spot market prices rose month on month. Shandong PB powder Friday quoted 560yuan / ton, Tangshan PB powder Friday quoted 570yuan / ton, compared with the pre-festival quotation basically up 10%.

The MMi 62% iron ore port spot price index closed Friday at 574 yuan / ton, up 1 yuan / ton from 573 yuan / ton before the festival. The MMi 62%CFR price was $74.60, up $0.47 / ton from 74.13 before the holiday.

[summary of weekly supply]

12.28-1.3 A total of 69 ships arrived at the port of China, with an estimated arrival volume of 9.8 million tons, a decrease of 390000 tons compared with the previous forecast of 10.19 million tons. During the period, Australian exports are expected to fall 380000 tons to 15.33 million tons, Brazil is expected to drop 170000 tons to 7.9 million tons, iron ore supply continues to provide some support to market prices.

From the current port inventory, Qingdao, Rizhao, Jingtang, Caofeidian, Tianjin and Lianyungang New Year's Day after the total inventory decreased by about 11 million tons, a decrease of nearly 11 per cent. In terms of varieties, the current 6 port PB powder, Newman powder, Mike powder and FMG mixed powder increased in varying degrees, especially in Vaca and Pakistan. At the same time, the 6 port Pakistan mix, Jinbuba and super powder stocks are significantly lower than before the festival.

[summary of requirements for one week]

From the point of view of the sparse port after New Year's Day, the procurement of steel mills is more active; the resumption of production of Xuzhou steel works and the end of the production limit from Tangshan to No. 3, the overall sparse port gradually resumed. Demand for imported mines is expected to remain high next week as steel mills continue to replenish stocks before the festival, or continue to support spot port prices.

However, due to the recent increase in weather pollution, Changzhi City has all launched an orange early warning emergency response to heavily polluted weather since 18:00 on January 4, and the lifting time has not yet been determined. Iron and steel, coking, non-ferrous, coal and other key vehicle enterprises involved in the transportation of bulk raw materials and products will all implement cross-peak transport, limiting the number of transport vehicles in peacetime to more than 50%.

At the same time, the Department of Ecological Environment of Hebei Province decided to continue to organize the fourth round of special enforcement actions on the atmospheric environment within the scope of the province from 4 to 19 January 2019, which will deal with the implementation of the emergency plan for heavily polluted weather. The first three rounds of atmospheric environmental law enforcement found problems rectification and reform, on-line monitoring facilities installation networking, normal operation and other aspects of law enforcement inspection, the message side negative iron ore demand, SMM follow-up will continue to track the actual implementation.