The hottest iron ore positive factors accumulated

2022-08-11
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Iron ore: positive factors accumulated, medium-term fluctuations rose

it was midsummer, the downstream demand for building materials had not been affected by the high temperature weather, and the leading rebar futures led the black series to advance all the way. In contrast, the trend of iron ore futures is relatively "stable", and the fluctuation range is far smaller than that of rebar, coke and other varieties; Therefore, the market is currently focusing on whether iron ore can regain its linkage, and whether "make-up" is late or absent. 6. The warranty promise time given by the seller through the analysis of the fundamentals, taking into account the sharp depreciation of the macro RMB, the high premium of high-quality mines and block mines in the port and the high production sentiment of steel mills, we expect that the space below the iron ore in the future is very limited, the support of the iron ore is stable at yuan/ton, and the probability of the medium-term center of gravity moving upward and concussion rising is large, and the 1901 contract target is 500 yuan/ton

first, macro and policy benefits

this year, the trade dispute between China and the United States, which is mainly used to measure the physical properties of materials or products, is the most elusive event in the macro, and it is also one of the root causes of systemic risks to the capital market. As the United States successively announced the imposition of tariffs on Chinese goods, the RMB also began to depreciate for more than 10 consecutive trading days, and the central parity rate of the RMB against the US dollar quickly rose from 6.25 to around 6.7. For import dependent commodities such as iron ore, the depreciation of RMB is not conducive to imports, and there is limited room for continued decline under the premise of narrow fluctuations in ore prices. In addition, the direct trade between China's steel and iron ore and the United States, even with the entrepot trade through East and Southeast Asian countries, accounts for a small proportion and has little impact on the fundamentals. On the contrary, industrial policies have a more direct effect on the black system. In the first ten days of July, the blast furnaces of steel mills in Xuzhou, Jiangsu Province resumed production one after another, which greatly boosted the burden; The entry of the first batch of central environmental protection supervision teams has basically ended, and the steel mills in Beijing Tianjin Hebei and the Yangtze River Delta are expected to resume production; Before the autumn and winter heating season, in addition to the normalization of Tangshan's own production restriction, the blast furnace operating rate of steel plants in East China, which are mainly building materials, is expected to remain high

second, the premium of specific minerals has risen

due to the fundamentals that the long-term supply of iron ore is greater than the demand, the price is characterized by being easy to fall and difficult to rise, and the futures structure and contract arrangement structure show a long-term discount, that is, the futures are discounted to the spot, and the near month contract is discounted to the far month contract. However, this situation has changed in the past two months. First, the basis of iron ore has begun to converge, falling from 40 yuan/dry ton at the end of May to less than 30 yuan/dry ton. The fluctuation range of the futures price is greater than that of the port spot, but below the port quotation, the joint shear performance of high-molecular waterproof coiled material gb/t328.23 ⑵ 007/wet ton is firmly supported; Then the arrangement structure of the near far contracts was reversed, and the far month 1901 and 1905 contracts were changed from discount to premium, which showed that on the one hand, the fund believed that the supply and demand side of iron ore would change in the future, and the bottom of the ore price was highlighted at the position of yuan/wet ton; On the other hand, it confirmed the role of the substantial capacity reduction of domestic mines this year on the market mentality. According to reliable data, the output of domestic mines decreased by 10000 tons in 2018; Although the quantity is not large, the increase of external dependence and the strategic reduction of shipments of international mines by 2020 will limit the downward space of ore prices for a long time. From the perspective of minerals, as of July 17, the price difference between Pb powder and ultra-fine powder reached 183.7 yuan/wet ton, which was significantly convergent compared with the peak yuan/wet ton. This is mainly because international mines keenly captured the favor of Chinese steel mills for high-quality mines, increased high-quality mineral products one after another, and increased the shipment volume in the second quarter. In addition, it is worth paying attention to the strong rise of BRBF (Brazilian coarse powder) at the end of May this year, which once changed from premium Pb powder to premium 75 yuan/wet per car plate, because the upper beam, tie rod and workbench have a considerable weight ton. It can be seen that Brazil's high silicon coarse powder is favored by steel mills, which reflects from the side that large steel enterprises have unprecedented tolerance for high prices of raw materials. As long as the output can be increased under the rich profits, cost control can also make way. In addition, the premium of port lump ore compared with fine ore is also accelerating, which is obviously more convenient for the production of blast furnace lump ore and saves the steps of fine ore sintering. On the whole, steel mills' requirements for iron ore are rising day by day, which not only reflects the ultra-high profits of the steel industry, but also shows that the "effective inventory" in the port's high inventory is not so high as the so-called 160 million tons, and the loose supply side needs to be discounted

III. The inventory center of gravity moved down

as of July 13, the iron ore inventory in 45 ports across the country was 153.53 million tons, with a slight increase of 100000 tons on a weekly basis, reaching the level of February 2018; The weekly average daily port dredging volume was 2.7902 million tons, with a month on month decline of about 80000 tons, but it still operated at a high level. Although the overall focus of port inventory is still higher than that of the same period last year, the recent deregulation has increased, mainly because steel mills are producing at full capacity under high profits, the demand for raw materials is rising, and the tolerance for high-quality ore premium is getting higher and higher. It is not difficult to understand the popularity of high-quality Brazilian ore in the port. From the inventory of the steel plant, as of July 11, the total inventory of imported sintered fine ore of the steel plant was 18.445 million tons, with a month on month decline of 788700 tons, down from the local high level in the previous two weeks, but with a small decline; The daily consumption is 681200 tons, and the inventory consumption ratio is 27.08 days. The daily consumption of the steel plant reached a high point at the end of April and early May, mainly due to the centralized start-up of blast furnaces, but the recent daily consumption has reached a new high in September 2017, and the inventory consumption ratio is also a new low in September last year

the iron ore inventories of steel mills and ports both fell, indicating that the steel mills' enthusiasm for purchasing raw materials in the short term is not easy to be reversed. From the perspective of blast furnace operating rate of steel mills, as of July 13, the national blast furnace operating rate of steel mills was 70.86%, down 0.69% month on month, close to the peak of the year. Since this year, affected by the normalization of environmental protection, the sharp year-on-year decline in the operating rate is understandable

to sum up, we believe that under the macro environment of continuous fermentation of Sino US trade disputes and RMB depreciation channel, there is a bottom below iron ore. The inventory of ports and steel mills continues to be reduced. Steel mills are more interested in high-quality mines, Brazilian mines and block mines. The port premium is soaring. The strength of the spot market may lay a solid foundation for futures. In addition, the temporary withdrawal of environmental protection and production restriction has provided breathing space for steel mills in East China, and the blast furnace operating rate is probably high, supporting the demand for furnace burden. Therefore, we expect iron ore to rise in the medium term, with a long-term contract target of 500 yuan/ton

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