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[SMM analysis] Iron ore futures are back to 700 points, supported by demand, cautiously being too bearish.
May 27,2020 16:07CST
translation
Source:SMM
[SMM analysis: iron ore futures are cautiously overly bearish under the support of 700-point demand] on the whole, the month-on-month outbound of Australia and Pakistan has increased, and the outbound data led to a certain correction in the iron ore futures market due to the loosening of the expected supply side of the market. However, according to the results of the SMM survey, it is expected that the purchase volume at the terminal site will continue to increase in June compared with May. In the later period, the steel price is likely to show a strong trend. In the case of no significant negative changes on the demand side, there is an opportunity for iron ore to rebound in the later stage.
The content below was translated by Tencent automatically for reference.

SMM5, March 27: the most actively traded September iron ore contract hit its highest level since August last Friday, up more than 20% since the beginning of the year. However, due to yesterday's unexpected increase in foreign mine shipment data, the previous increase was too large, yesterday's mine price pullback fell to the lowest 685 yuan / ton. However, today's day closing decline narrowed to 0.07% to 706 yuan / ton, inflows of more than 700 million, a daily increase of 46000 hands.

On the demand side, SMM conducted a centralized survey on the actual situation of terminal demand, and a total of 46.34% of the sample enterprises clearly indicated that the purchase of raw materials in May was higher than that in April, which directly confirmed the strength and tenacity of steel demand in May. And according to the research situation, the terminal "steel demand" is expected in the later stage, and the purchase volume of the terminal site in June is expected to continue to increase compared with May. "check the details."

On the supply side, SMM data show that the current period of Australian departure increased by 1.62 million tons month-on-month to 17.42 million tons, an increase of 3.16 million tons over the same period last year, an increase of more than 20%. Brazil's port departure increased by 810000 tons to 5.52 million tons in the current period compared with the previous period. However, the number of arrivals to Hong Kong has not increased, with a decrease of 140000 tons compared with the previous period.

On the inventory side, iron ore port inventories reached a new low in nearly three years. As of May 22, inventories at 35 ports tracked by SMM totaled 100.45 million tons, down 1.33 million tons from the previous month and 17.84 million tons from a year earlier, the lowest level in nearly three years. At the same time, the average daily dredging capacity of the port increased by 36000 tons month-on-month to 2.805 million tons, an increase of about 2.8 per cent. The rigid demand of domestic steel mills for iron ore has led to a continuous decline in port inventory.

On the whole, there has been an increase in the month-on-month outbound of Australia and Pakistan, and the outbound data has led to a certain correction in the iron ore futures market due to the loosening of the expected supply side of the market. However, according to the results of the SMM survey, it is expected that the purchase volume at the terminal site will continue to increase in June compared with May. In the later period, the steel price is likely to show a strong trend. In the case of no significant negative changes on the demand side, there is an opportunity for iron ore to rebound in the later stage.

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