With support from macro and fundamentals, iron ore prices are expected to fluctuate upward this week

Last week, the social financing data showed that M1 declined 7.3% YoY in August, reflecting weak domestic demand. Meanwhile, frequent news of steel anti-dumping measures led to a decrease in market expectations for overseas demand, causing iron ore futures prices to open sharply lower. However, with the US Fed cutting interest rates by 50 basis points, slightly exceeding market expectations, market expectations for future macro policies improved, driving iron ore prices to rebound from the bottom. From the perspective of iron ore fundamentals, the continuous decline in prices in the earlier period led to a significant reduction in shipments from non-mainstream mines. Coupled with the impact of typhoon weather in China, the volume of arrivals declined for two consecutive weeks, easing supply pressure. On the demand side, although the increase in pig iron last week was small, some steel mills stocked up in advance ahead of the National Day holiday, boosting overall iron ore demand and supporting ore prices. However, high port inventory still suppressed ore prices, and in comparison, spot prices fluctuated less. As for port prices, the spot price of PB fines in Shandong remained stable compared to two weeks ago.

Looking ahead to this week, after the US Fed's rate cut, market expectations for domestic macro policies strengthened, and market sentiment improved. From a fundamental perspective, global supply remains low, and frequent typhoons in China may continue to reduce the volume of arrivals. On the demand side, the increase in pig iron is expanding, and the peak period for pre-holiday stocking by steel mills is approaching, so overall iron ore demand is expected to continue to rise. Overall, both macro policies and fundamentals support ore prices, and iron ore prices are expected to fluctuate upward this week.