March 11 domestic iron ore futures suffered heavy losses. Analysts said that domestic steel mills due to environmental restrictions upgrading the opening rate of production, resulting in reduced demand for iron ore, the recent trend of iron ore prices under pressure.In the absence of independent drivers, it is expected that short-term iron ore futures will follow the spiral steel futures shock operation.
Futures hit a new low this month
Yesterday, iron ore futures fell low, with the main 1905 contract at a low of 594.5 yuan/ton, a new low since February 27, closing at 598 yuan/ton, down 18.5 yuan or 3 %.
Zhangguichuan, a futures analyst at CIC, said that domestic steel mills have experienced a decline in production due to environmental restrictions and lower demand for iron ore, leading to a continuous increase in iron ore port stocks.
On the inventory side, data provided by Haitong Futures showed that last week, the total stock of iron ore ports rose to 147.45 million tons, of which 45 port blocks accumulated, from 16.453 million tons to 16.787 million tons; The pellets also accumulated significantly, rising from 4.886 million tons to 5.108 million tons; The ratio of Australian iron ore deposits dropped to 74,469,800 tons, and Brazilian mines accumulated significantly to 42,881,500 tons.From the level of iron ore stocks as of March 8, it has not been affected by the Brazilian mine disaster for the time being and is expected to affect the volume of Brazilian ore shipments in the second quarter, which will affect port stocks.
In fact, after the Spring Festival, due to the impact of the Brazilian Vale mine disaster, the 1905 contract of iron ore futures hit 657.5 yuan/ton in one fell swoop. However, as the incident was gradually digested by the market, the futures price fell.
Analysts at haitong futures said the vale mine disaster in Brazil, which gradually fermented during the spring festival, is expected to affect the production of about 70 million tons of iron ore, but is expected to further exceed expectations due to the annual output of the entire southern system at 86.4 million tons. In addition, the company is working to restore the operation of the Brucutu mine.
Lack of independent drivers in the short term
"In the context of the weakening of the marginal force driven by the independent rise in the price of domestic iron ore, the price trend of spiral steel and whether the Brucutu mining area can resume operations have become factors affecting the trend of iron ore. "Haitong futures analysts said that at present, overseas shipments of the four major mines are not affected by the mine disaster for the time being, it is estimated that the second quarter of iron ore shipments.Vale is expected to resume operations in the Brucutu mining area for a short period of time, and the increase in the price of iron ore due to the Brazilian mine disaster will likely limit the room for significant price declines.
On the supply side, as of March 1, the total amount of iron ore shipments from Australia and Brazil decreased by 2.86 % year-on-year to 24.248 million tons, of which Australia's shipments increased by 0.91 % year-on-year to 17.291 million tons, and Brazil's shipments dropped by 11.1 % year-on-year to 6.957 million tons; However, in terms of ring ratio, Brazilian and Australian ore shipments have increased significantly.For now, the vale mine disaster in February has not affected Brazil's iron ore shipments for the time being.In terms of ports, the current transaction situation of iron ore in domestic ports is due to the resumption of production of some long-process blast furnaces in steel mills. Compared with the situation after the Spring Festival, as of March 1, the transaction ratio of iron ore ports has increased significantly to 875,500 tons. However, due to environmental protection, the production of sintering machines and blast furnaces has been limited. The transaction situation is expected to deteriorate.
For the post-market, the above analysts believe that the recent iron ore spot trading volume due to domestic environmental protection restrictions on the sintering machine has weakened.In addition, from the iron ore shipments and port inventory situation, the current Brazilian mine disaster has not affected the domestic iron ore supply situation, Australia and Brazil iron ore shipments have recovered from last week.In the absence of independent drivers, it is expected that short-term iron ore futures will follow the spiral steel futures shock operation.