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Iron ore wide range oscillation is dominant.
Jul 31,2020 09:51CST
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM News: since mid-July, iron ore futures prices show a horizontal oscillation pattern. As of July 30, 2009 contracts for iron ore rose 1.02 per cent to 840 yuan per ton. Spot, Platts index oscillatory upward, Jinbu Ba powder rose to 766 yuan / ton.

Steel demand remains strong

From the perspective of macroeconomic indicators, the construction industry remains strong. The data show that from January to June, investment in infrastructure construction (excluding electricity) increased by 2.7% year-on-year, rising 3.6% from January to May; investment in real estate development increased by 1.9% year-on-year, up 2.2% from January to May; the sales area of commercial housing increased by-8.4% year-on-year, rebounding by 3.9% from January to May. The area of new housing starts increased by-7.6% over the same period last year, an increase of 5.2 percentage points from January to May.

Previously, terminal demand was mainly supported by two major factors: the rush of real estate construction and the improvement of infrastructure investment. For some time to come, infrastructure will be affected by the issuance of 3.75 trillion yuan of special bonds, the capital is relatively abundant, and the operating rate is expected to remain high. Real estate construction gradually entered the off-season, June single-month real estate sales data slowed significantly compared with May. From the weekly land purchase and commercial housing transaction data, in July, commercial housing transaction area and land transactions have fallen from a high level, indicating that after the release of compensatory demand in the early stage, the real estate market began to cool down, which will restrain the terminal demand for iron and steel to a certain extent. Recently, many hot cities have issued real estate regulation and control policies one after another. On the whole, there is little room for improvement in the real estate market in the future.

Steel output remains stable

Recently, the utilization rate of blast furnace capacity has remained stable. Relevant data show that last week, the actual utilization rate of blast furnace capacity of steel mills across the country was 85.9%, up 0.3 percentage points from the previous month. Hot metal production rebounded slightly, with an average output of 2.478 million tons last Sunday, up 4000 tons from the previous month. The implementation of production restrictions in Tangshan is very limited. Last week, the utilization rate of blast furnace capacity in Tangshan was 88%, an increase of 1.77% from the previous month. The output of the five major varieties of steel was 10.76 million tons, up 40, 000 tons from the previous month, down 0.2% from the same period last year.

The price of scrap in East China remains stable, and the current price difference between scrap and hot metal is-28 yuan / ton. The economy of scrap is gradually emerging, which also has a certain restraining effect on the further rise of iron ore prices.

The transportation of the four major mines rebounded.

Iron ore shipments rebounded in the week of July 26. Shipments from Australia and Brazil totaled 23.25 million tons, up 1 million tons from the previous period. Australia shipped 16.54 million tons, a decrease of 90, 000 tons compared with the previous month. Of this total, Rio Tinto shipped 5.38 million tons, down 550000 tons from last week; BHP Billiton shipped 4.81 million tons, down 440000 tons from last week; and FMG shipped 2.95 million tons, 290000 tons less than last week. Brazil shipped 6.71 million tons, an increase of 1.09 million tons compared with the previous month. Of this total, Vale shipped 5.99 million tons, an increase of 1.24 million tons compared with the previous month. The gradual recovery of Brazilian shipments will help it to complete the annual shipping guidelines of 310 million-330 million tons. The recent shipments of the four major mines are all within the seasonal expectation. Arrival data dropped month-on-month, but still maintained growth compared with the same period last year, is expected to maintain a high level of oscillation, in the case of a significant recovery in supply, port inventory will continue to pick up.

At present, from the point of view of the disk, the profit of the steel mill is only about 120 yuan / ton, although there is a certain degree of repair compared with the previous period, but the overall level is still at a low level. Therefore, before the rebar price rises sharply, the iron ore will still maintain a wide oscillation pattern.

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