SMM9: China imported 100.36 million tons of iron ore and concentrate in August 2020, according to customs data today. In the first eight months, China imported 760 million tons of iron ore, an increase of 11 percent. The average import price was 652.4 yuan per ton, down 0.2 percent.

As domestic pig iron production continued to climb, iron ore imports reached an all-time high in July. China's iron ore imports dropped month-on-month in August, mainly because, on the one hand, the operating rate of blast furnaces in domestic steel mills dropped 0.5% to 89.8 in August compared with the end of July, and the profits of superimposed steel mills shrank rapidly in August, and steel mills are not willing to pursue output. On the other hand, due to the influence of high temperature and torrential rain, the terminal downstream demand is lower than expected. The stock of finished materials in domestic steel mills remained high in August, and the demand for raw materials such as iron ore adopted a "inventory reduction" strategy.

SMM believes that the operating rate of blast furnaces on the demand side remains high, but in the near future, there are still strict expectations of environmental production restrictions in Tangshan area, and production restrictions are hyped or continue to affect the demand situation. In addition, the situation of high inventory of steel downstream has not been alleviated, and there is a certain pressure on steel prices, the purchasing enthusiasm of steel mills is weak, and the current price of iron ore is favorable. However, the profits of steel mills have rebounded slightly recently, the structural contradiction of superimposed port spot has not been resolved, and iron ore prices are also strongly supported. There are many replenishment expectations near the National Day, which will still boost iron ore prices, so although the fundamentals of supply and demand weakened month-on-month in September, prices may remain volatile in a high range.

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