[SMM Analysis] Port inventory continues to increase, and it is difficult to change the high price pattern of iron ore.

SMM7 March 20: the total inventory of 35 ports tracked by SMM in this period totaled 102.9 million tons, an increase of 1.48 million tons compared with the previous month and a decrease of 4.2 million tons compared with the same period last year. In this period, the increase in the inventory of imported mineral ports expanded, and the month-on-month growth of Shandong and Tangshan main ports showed an increasing trend. At the same time, the average daily dredging volume of the port fell by 55000 tons to 2.811 million tons compared with the previous month. Most steel mills continue the on-demand procurement strategy, leaving Hong Kong for a short-term or difficult to see a substantial increase. Although the last period of SMM statistics of iron ore arrival decreased slightly compared with the previous period, there is still a pressure on the port in some ports, and the inventory of imported ore ports is still expected to continue to increase in the later period.

"Click to view SMM iron ore port inventory data

In terms of downstream demand, Tangshan has recently issued a notice on environmental protection, production restrictions and strict control. According to SMM, the current shutdown and reduction of blast furnace production is not obvious, the impact of blast furnace production is limited, the short-term iron ore demand remains high, and it is expected that the short-term import market may continue to fluctuate at a high level. Overall, steel mills are still replenishing inventory on demand, but the mentality tends to be more cautious.

According to the statistics of SMM, the operating rate of blast furnace rebounded slightly in the third week of July, mainly from the end of the maintenance of some steel mills. It is expected that the operating rate will remain relatively stable this week, the demand side will continue to be high, and it will also provide strong support for iron ore.

SMM believes that short-term iron ore in the case of absolutely low inventory, prices are also high during the year, while the current long-process steel mill operating rate remains high, strong demand, the market has no obvious incentive to take the initiative to reduce production. It is predicted that after the current high falls in the short term, if there is no other external news stimulation, the imported mining market will fluctuate mainly this week or at a high level.

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