Iron ore prices fell to lows at the beginning of the year

The monitoring data of the Lange Steel Cloud Business Platform shows that the price index of imported iron ore has continued to fall recently, and the demand has been significantly weakened.

   Wang Jing from the Lange Steel Research Center pointed out that the reduction of steel mills' production has gradually entered the implementation stage. In late July, the daily crude steel output of key steel enterprises as calculated by the China Iron and Steel Association fell for the first time this year. At the same time, the top of global commodity demand is approaching, and iron ore prices may enter a long-term downward phase.

  According to the monitoring of Xinhu Futures, the profit of steel mills continued to decline, and the steel mills gradually adjusted the material structure. The ratio of pellets in the blast furnace decreased and the ratio of sintering increased. At the same time, the grade of sintered ore continued to decrease, the bargaining power of Chinese and Australian flour gradually weakened, and the demand for Brazilian flour and low-quality flour gradually increased. Since July, the average daily molten iron output of 247 steel mills has continued to decline.
   With the gradual reduction of crude steel output, the demand for materials used by steel mills has continued to weaken. At the same time, steel mills took the initiative to remove raw material inventory, and the inventory of 247 steel mills dropped from 11,700 tons at the beginning of June to 11,200 tons at the end of July. In the context of weakening demand, iron ore port inventories climbed from 121 million tons in mid-June to 128 million tons at the end of July.
   The CICC research report shows that since the off-season, domestic steel production has gradually slowed down, and iron ore prices have gradually weakened. The high price of iron ore has passed, and there is no condition to continue rising.
   Crude steel production cut
   Recently, many places have introduced measures to limit the production of crude steel. Due to the high level of crude steel output in the first half of the year, some steel companies are under pressure to reduce production in the second half of the year. The marginal slowdown of downstream demand for steel, combined with the dual effects of environmental protection and production restrictions, the agency expects that the growth rate of domestic steel production will turn negative year-on-year from the third quarter of this year, and iron ore prices will continue to fall.
   Shougang shares pointed out that companies with more output in the first half of the year may have more pressure to reduce production in the second half of the year, but they have to be considered based on the overall arrangements of each region.