[SMM monthly Outlook] how does the iron ore price hover around the 1000-yuan mark for one month?

SMM12 March 29: to the end of the year, looking back at the commodity market this year, iron ore gains should be in the front position. In the first quarter, iron ore fell lower and then climbed slowly. However, due to overseas outbreaks and black swan events such as negative oil prices, iron ore futures plummeted at the beginning of the second quarter, hitting a low of the year, reaching an intraday low of 542 yuan / ton on April 2. After that, mineral prices went all the way up with the opening of the domestic infrastructure curtain. In the third quarter, due to entering the traditional off-season of the summer, and the rainstorm and flood weather affected the decline in demand downstream, mineral prices consolidated and fluctuated. In the fourth quarter, especially after November, iron ore started to soar, breaking through the thousand yuan mark and continue to refresh the high level. In late December, due to the deterioration of the external mutation epidemic and pressure from big businesses, the iron ore rally cooled down.

The overall trend of iron ore this month is rising first and then suppressing. At the beginning of December, the macro market sentiment was warm. Good black commodities. Superimposed by Brazil's Vale, cut its iron ore production targets for 2020 and 2021, market bullish sentiment continues to rise. Coupled with the optimistic performance of iron ore fundamentals, the main contract of iron ore futures hit a seven-year record high. In the middle of this month, inventories in the port fell 4 times in a row, and the Australian weather caused the port to clear the port and push the iron ore higher again. Until the end of the month, the macro European mutation epidemic fears caused the market to sell risky assets, coupled with the steel association and other calls to reduce financial risk pressure, iron ore futures prices began to fall.

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SMM believes that short-term iron ore may fluctuate weakly with finished products, but due to the expected support of replenishment before the Spring Festival in January-February, mineral prices are generally easy to rise and difficult to fall. In addition, according to the feedback of some steel enterprises, the demand for finished materials in some downstream industries and steel trade is OK, and the steel mills are less willing to take the initiative to reduce production and stop production, and the demand for raw materials such as iron ore can be maintained; coupled with the impact of news that India may ban iron ore exports, if the export of iron ore in India is completely banned, iron ore prices are more likely to rise and harder to fall.