- Introduction
This week, the gap between supply and demand of iron ore narrowed, superimposed on the market's expectations for the resumption of blast furnace production after the easing of the epidemic, and the price of iron ore fluctuated upwards. As of Friday, the Mysteel 62% Australian Flour Index was $159.90/dry ton, up $9.35/dry ton, or 6.21% from Friday; and the Mysteel 62% Australian Flour Spot Index was $1022/wett, up $46/wettt, up 4.71% month-on-month.
Fundamentally, on the supply side, the end-of-season impulse of Australia-Pakistan shipments, and the increase in global shipments are obvious, but due to the extension of The Brazilian shipping schedule, China's arrivals have decreased more than expected and are still hovering below the annual average. On the demand side, the epidemic still has an impact on the production of steel mills, and the blast furnace, which was reduced by the shortage of raw material supply in the early stage, the reduction of molten iron was reflected this week, and the output of molten iron stopped increasing and falling. The recovery of low arrivals and evacuations has led to another decline in port inventories. In summary, iron ore prices have oscillated upward this week.
Part 1. Price Review
1.1 Iron ore port spot and forward spot prices
Port spot and forward spot: On Friday, mysteel 62% Australian powder index was $159.90/ton, an increase of $9.35/ton; Mysteel 62% Australian powder spot index was 1022 yuan/ton, an increase of 46 yuan/ton; Mysteel 65% pellet premium index was $51.50/ton, down $7.45/ton; Mysteel 62.5% block ore premium index was $0.3000/ton, Decreased by $0.0765/tonne sequentially. This week's forward floating premium for PB powder was -$1.5/mt, up $0.3/mt month-on-month.
1.2 Iron ore futures price and delivery profit
Derivatives market: this Friday afternoon liantie main contract closed at 926.0, up 78.5 month-on-month; as of thursday, the SGX main contract closed at 161.34 US dollars / ton, up 7.11 US dollars / ton; Qingdao port Jinbuba powder 05 contract seller's warehouse delivery profit - 55.01 yuan / ton, an increase of 43.05 yuan / ton, an increase of 70.63 yuan / ton from last year.
1.3 Iron ore spreads
In terms of price differences: this week's high and low product spreads narrowed, as of Friday, the price difference between PB powder and super special powder in Qingdao Port was 275 yuan / ton, narrowing by 20 yuan / ton from the previous month; the premium of Brazilian mines increased, and the price difference between Qingdao Port Card Powder and PB Powder was 190 yuan / ton, an increase of 25 yuan / ton; the price difference between powder blocks widened, and the price difference between PB blocks and PB powder in Qingdao Port was 330 yuan / ton, an increase of 55 yuan / ton month-on-month. In terms of the current basis of the period: PB powder basis was 190.02, weaker than 28.78; super special powder basis was -117.42, which was 6.99 weaker than the previous month.
1.4 Profit from imported iron ore and profit from steel mills
Profit: As of Friday, the spot import profit of PB powder in Qingdao Port was -66.44 yuan / ton, down 14.18 yuan / ton from the previous month; the spot import profit of Card Powder of Qingdao Port was -44.07 yuan / ton, down 31.13 yuan / ton from the previous month; the spot import profit of qingdao port PB block was 69.37 yuan / ton, down 26.78 yuan / ton. In the current period, the gross profit of steel mills in Hebei was 246.15 yuan / ton, an increase of 118.04 yuan / ton, and the price difference between scrap and molten iron was 191.58 yuan / ton, an increase of 12.83 yuan / ton. (Steel mill profit is calculated based on actual survey costs, updated on Mondays)
Part 2. Market Review
2.1 Imported iron ore prices and weekly changes in each port (unit: yuan / ton)
2.2 Regional interpretation
East China: Iron ore prices have risen this week, and market trading sentiment has improved
Iron ore market prices have risen this week, coinciding with the advent of a small holiday, and steel mill purchases have increased compared with before. As of Friday, the price of PB powder in Qingdao Port was 1010 yuan / ton, up 45 yuan / ton month-on-month; the market price of super special powder was 735 yuan / ton, up 65 yuan / ton week-on-week, and the low-end products continued to narrow.
In terms of data, this week's East China regional blast furnace gradually resumed production, the average daily pig iron production further increased, but the current steel mill is still not full of production, there is still room for resumption of production next week; inventory, this week's survey cut-off point of some steel mills due to poor sales of finished products to reduce inventory, the total inventory of regional sample steel mills was 19.84 million tons, a month-on-month decrease of 750,000 tons, after Thursday, the steel mill awareness is about to take a holiday and possible transportation problems in the future, Friday's procurement demand increased significantly. In terms of spot resources, traders shipped positively this week, and traders' inventories fell slightly.
Shandong port super special powder rose the most this week, and the PB block continued last week's decline. It is understood that the reasons for the weakness of the decline of the block mine are as follows: First, the premium of the block mine in the US dollar market is lower, and the traders mainly cash in profits and ship. Second, the proportion of block ore into the furnace in the steel mill continued to decline, and the demand was weak. Third, the block mineral resources of Shandong port have gradually increased, and the bargaining power has declined.
On the whole, the current market focus is mostly concentrated on the rigid replenishment after the resumption of steel mills after the holiday, so the price is relatively firm. However, at present, steel mills are affected by the epidemic and other factors, the sales of finished products are not smooth, the collection of funds is slow, coupled with the low level of profits, the acceptance of further rise in iron ore prices is getting lower and lower, and it is expected that iron ore prices will fluctuate next week. (Details: Xiao Wei)
North China iron ore: Tangshan and Hong Kong inventories remained high and imported low-grade Australian powder trading active
Iron ore prices in Tangshan generally rose this week. As of this Friday, Caofeidian Port PB powder 1028 yuan / ton, up 38 yuan / ton; super special powder 740 yuan / ton, up 55 yuan / ton; card powder 1225 yuan / ton, up 47 yuan / ton; Newman block 1355 yuan / ton, up 10 yuan / ton.
From the perspective of regional fundamentals this week, the supply side of Tangshan two ports this week to port 2.773 million tons, a decrease of 1.097 million tons from last week; the demand side of Tangshan Steel Mill survey sample molten iron production fell by 21,600 tons to 312,400 tons, blast furnace operating rate of 61.54%, the same as last week, the port of Dredging by the impact of automobile transportation restrictions to maintain a low level, this week's port evacuation of 292,500 tons, a decrease of 11,500 tons from last week. Reflected in the inventory side, the total inventory of The two ports in Tangshan this week was 32.005 million tons, an increase of 285,000 tons from last week's inventory, while the number of ships in port fell by 5.
This week, Tangshan has eased the restrictions on automobile transportation, and traffic in some areas can flow in an orderly manner, but there is still greater resistance to cross-regional transportation. Steel mills basically consume inventory in the factory, and some steel mills replenish their warehouses due to rigid demand. In terms of traders, the overall market sentiment this week maintained a good atmosphere, traders were more motivated to ship, and the quotation was transparent. The mainstream varieties of active trading in Tangshan this week are super special powder, and the current steel mills are in a state of low profit, and the tendency to low-grade powder is higher. In the short term, the port inventory is still in a high state, and the release of market demand also needs to look at the strength of the impact of the follow-up epidemic, and it is expected that the ore price will fluctuate widely. (Details: Chen Xiaonan)
Areas along the river: the overall price of minerals is rising, and the transaction is better
Spot prices at imported ore ports along the river have risen and fallen this week, and the number of transactions has decreased compared with last week. As of Friday, Jiangyin Port PB powder 1035 yuan / ton, up 29 yuan / ton; PB block 1370 yuan / ton, down 15 yuan / ton; 62.5% BRBF 1145 yuan / ton, up 39 yuan / ton.
In terms of varieties, the price of block ore in the area along the river has shrunk significantly this week, and the price spread of PB powder has dropped by 44 yuan / ton from 379 yuan / ton to 335 yuan / ton. According to the survey, at present, the saleable resources of block mines along the river are acceptable, but they are affected by the maintenance of stewing furnaces in some steel mills along the river, and the overall demand for block mines is weak. The spot price of block ore has then fallen sharply. The variety with better performance this week is YangDi powder, with the advantage of low aluminum content in low-grade resources, the price difference with PB powder this week is located at 95-105 yuan / ton, which is the lowest price difference range this year.
In terms of steel mills, the total available days of imported ore inventory in steel mills in the sample were 49 days, a decrease of 1 day from last week. Specifically, the inventory in the steel mill this week was basically flat compared with the previous period, and there was still a slight decrease in the molten iron. Under the continuous impact of the epidemic, some steel mills along the river have overhauled and stewed furnaces due to insufficient supply of auxiliary materials or damaged profits, and the recent spot demand and intention to replenish the warehouse are generally weak.
In terms of traders, the overall market this week showed an upward trend, the overall quotation sentiment of traders was more positive, and the price was more with the market, mainly in the shipping wheel warehouse. Most traders take the expectation of resuming work and production as a strong support point for the upside market, and are more optimistic about the future market. It is expected that the iron ore spot market along the river will maintain a volatile operation in the short term (detailed inquiry: Huang Yubei)
Part 3. Fundamentals
3.1 Review of iron ore fundamentals
Supply: Mysteel Australia Brazil 19 port iron ore shipments totaled 26.016 million tons, an increase of 4.055 million tons from the previous month. China's 45 ports arrived at 19.256 million tons, a decrease of 2.669 million tons from the previous month.
Demand: Mysteel surveyed 247 steel mills blast furnace operating rate of 77.45%, down 0.76% from last week, down 6.00% from last year; the average daily output of molten iron was 2.261 million tons, down 41,700 tons month-on-month, down 62,700 tons year-on-year.
Inventory: This week, Mysteel counted the total inventory of 45 port iron ore in China 153.8902 million tons, down 1.2891 million tons from the previous month. The average daily port volume was 2.6919 million tons, an increase of 49,800 tons from the previous month. At present, the number of ships in port is 118 and 9 are reduced.
3.2 The end-of-season impulse of Australia-Pakistan shipments, the increase in global shipments is obvious
In this issue, Mysteel Australia Brazil 19 Port Iron ore shipments totaled 26.016 million tons, an increase of 4.055 million tons from the previous month. Australian shipments increased by 1.807 million tonnes to 18.872 million tonnes, up from a weekly average of 1.749 million tonnes this year, while Shipments from Brazil increased by 2.248 million tonnes month-on-month to 7.144 million tonnes, a new high for shipments this year. Specific to the mines, FMG shipments increased by 923,000 tons month-on-month to the lowest level this year, BHP shipments increased by 638,000 tons month-on-month, Rio Tinto shipments decreased by 482,000 tons to 6.027 million tons, and other mines increased by a larger increase in Mount Roy; VALE shipments continued to pick up, increasing by 1.451 million tons to 5.195 million tons.
3.3 Brazil's shipping schedule has been extended, and the arrival of iron ore in Chinese ports has dropped sharply
The arrival volume of China's 47 ports in the current period was 20.605 million tons, a decrease of 3.017 million tons from the previous month. The arrival volume of 45 ports was 19.256 million tons, a decrease of 2.669 million tons from the previous month. Among them, the arrival volume of Australian mines was 13.907 million tons, a decrease of 822,000 tons month-on-month; the arrival volume of Brazilian mines decreased by 2.356 million tons to 2.366 million tons; and the arrival volume of non-mainstream mines increased by 509,000 tons to 2.983 million tons month-on-month. In terms of sub-regions, the arrivals in North China and East China decreased significantly, with a total decrease of 2.258 million tons.
3.4 North China and Central China resumed work actively, and the output of concentrate powder rebounded
The utilization rate of mine capacity in the current period has improved. With the end of the two sessions, the resumption of work and production of some mines in North China and Central China has increased, the epidemic control in southwest China has eased, the relaxation of overseas transportation policies has led to an increase in the supply of raw materials, and the capacity utilization rate of mines in the three major regions has increased; while some mines in East China have been affected by the epidemic and have been restricted, and the utilization rate of mine capacity has shown a downward trend
Inventory: The total inventory of iron concentrate in the mine in this period is flat compared with the previous period, but there is differentiation between regions, the demand for mines in the northwest region has improved, and the transportation conditions have improved; the transportation restriction policy in the southwest region has been relaxed, the circulation of resources has been active, the shipment of the two major regions has been restored, and the mine concentrate has been destocked faster; other regions have been affected by the epidemic, the shipping effectiveness has declined, the cross-regional circulation of resources in the northeast, north China, east China and central China has decreased, and the mine has accumulated.
3.5 Due to the reduction in the supply of raw materials, the impact of the blast furnace began to reflect this week, and the output of molten iron stopped increasing and turning down
Mysteel surveyed 247 steel mills blast furnace operating rate of 77.45%, down 0.76% from last week, down 6.00% year-on-year; blast furnace ironmaking capacity utilization rate of 83.76%, down 1.68% month-on-month, down 3.41% year-on-year; steel mill profitability of 74.89%, down 1.30% month-on-month, down 14.29%; average daily molten iron production of 2.2610 million tons, down 41,700 tons month-on-month, down 62,700 tons year-on-year.
In this issue, Mysteel surveyed 247 steel mill samples with an average daily output of 2.261 million tons, down 41,700 tons from the previous month; a total of 12 new blast furnaces were overhauled, 5 blast furnaces resumed production, and the blast furnace operating rate was 77.45%, down 0.76% from the previous week. Specifically, this week's maintenance is mainly concentrated in East China, on the one hand, due to the expansion of the impact of the epidemic on steel mill production, individual steel mills passive furnaces, on the other hand, due to the capacity replacement of small blast furnaces to stop production and large blast furnaces put into operation. Reflected in the molten iron, this week's output reduction is mainly in the northeast and north China, mainly due to the impact of last week's overhaul of the blast furnace continuation, in addition, this week, some steel mills affected by the supply of raw materials have reduced production, so the average daily molten iron production decline expanded. (This week's data is the daily average of steel mill molten iron production from March 24 to March 30).
3.6 Port operations and steel mill pick-ups continue to be affected by the epidemic, and the total inventory of imported mines has maintained a downward trend
This week, Mysteel counted the total inventory of 45 MTR in China 153.8902 million tons, down 1.2891 million tons from the previous month. The average daily port volume was 2.6919 million tons, an increase of 49,800 tons from the previous month. At present, the number of ships in port is 118 and 9 are reduced. Mysteel counts the total inventory of 47 ports of iron ore 159.4102 million tons, and the average daily dredging volume of 47 ports is 2.7999 million tons. With the improvement of the epidemic situation, the port clearance has gradually rebounded, and the arrival of iron ore in the port during the cycle has fallen back to a low level again, and the port warehouse has declined again. Specifically, this week's reservoir reduction area is mostly concentrated in the north, of which some ports in East China and North China have gradually recovered their motor transport, the average daily port volume has increased significantly, the sustainability of superimposed arrivals is low, and the port inventories in the two regions have been reduced by different ranges; while the areas along the river have gradually passed due to the impact of phased closures, the number of ships in the region has begun to increase, and the port clearance has not been restored, and the inventory has rebounded.
3.7 Transportation in North China has not yet returned to normal levels, and the imported ore inventory of steel mills nationwide continues to decline
Mysteel statistics the total imported iron ore inventory of steel mills nationwide was 108.1167 million tons, a decrease of 2.3312 million tons month-on-month; the daily consumption of imported mines of the current sample steel mills was 2.7877 million tons, a decrease of 50,600 tons month-on-month, and the inventory consumption ratio was 38.78, a decrease of 0.13 days month-on-month. In this period, the inventory of imported ore in steel mills nationwide continued to decline, far lower than the level of the same period last year, and the inventory turnover days were lower than the same period last year. Sub-regional point of view: although the transportation in North China has eased in the current period, it has not yet returned to normal levels, and the spot procurement of steel mills is more cautious, resulting in a continuous decline in imported mineral inventories; steel mills along the river have slightly declined due to the reduction of long-term shipments; and the inventory of imported ore in other regions has fluctuated slightly. Daily consumption: Affected by the epidemic and transportation in the northern region, some steel mills passively smother the furnace and reduce production, the daily consumption of blast furnaces is reflected in this period, the profits of superimposed steel mills are declining, the cost performance of domestic mines is rising, and some steel mills have lowered the ratio of imported mines, so the daily consumption of imported mines in this period has been significantly reduced.
3.8 Forward spot: the resumption of production is gradually opened, the price of ore has risen sharply, and the transaction of low-grade powder resources is active
Iron ore prices in the forward market rose sharply this week, and the epidemic situation began to improve in some areas, and the resumption of production gradually began. Many steel mills have re-entered the forward market to purchase medium and low-grade block mineral resources with large discounts, mainly because the profits of steel mills are currently in a weak state. However, this week' trading activity between traders has weakened, and speculative position building has also declined significantly from last week, mainly based on active shipments.
The overall transaction volume of the forward market has decreased, and the number of mine tenders in the primary market has increased slightly compared with last week, but the liquidity of the secondary market has weakened, and the number of transactions has decreased significantly. Although the overall number of transactions has declined, the overall transaction price is higher, and the premium of most varieties has increased, which may be related to direct sales in mines. The transaction varieties involve medium-grade Australian powder resources MNPJ and low-grade powder block resources including super special powder and Jinbao powder. The transaction of low-aluminum mixed resources is acceptable, but Yangdi resources have not yet been traded. In addition, the profits of steel mills are still weak, the attention to low-grade powder resources is extremely high, and the premium of high-grade card powder resources is gradually narrowing. In terms of other varieties, with the relaxation of the sintering policy, the block ore premium fell sharply this week, and the pellet premium continued to weaken.
3.9 Port Spot: This week, the port spot transaction has improved significantly, and the transaction of medium and low products is active
This week, the average daily turnover of port spot is 996,000 tons, up 24.4% month-on-month; the port spot price is running strongly, the market trading atmosphere is improving, traders are more active in shipping, steel mills are appropriately replenished before the holiday, procurement has improved, and traders' speculative demand has improved.
In terms of varieties: the transactions of mainstream Australian powder and low-grade minerals have improved significantly, the price of block balls is relatively firm, and the transactions are weakening. Small and medium-sized traders are relatively optimistic about the future market, speculative demand has improved, and the main speculation is mainstream low-quality resources; steel mill profits are low, low-grade ore transactions remain relatively high, block ball resources are tight, and the premium remains high. Overall, this week's port spot transactions turned better, and the current trading volume is in the middle of the year, weaker than the same period last year.
Part 4. Review of this week's hot spots
4.1, CSN's goal is to plan to double iron ore production by 2026
According to investment firm Levant, CSN Mineração Mining, a subsidiary of the iron ore business of Brazilian steelmaker Companhia Siderurgica Nacional (CSN), is on track to become the world's fifth-largest iron ore producer.
Levant reports that CSN aims to double iron ore production by 2026, and that CSN will invest 12 billion reais ($2.52 billion) over the next decade to increase iron ore capacity. Iron ore production is expected to increase by 75% between 2027 and 2032.
In 2036, CSN iron ore production capacity is expected to reach 116 million tons. This year, CSN expects iron ore production to reach 39-41 million tonnes per year.
4.2 Ukrainian miner Metinvest's iron ore exports to Europe doubled this month
This month, Metinvest, Ukraine's largest steelmaker, doubled its iron ore shipments to Europe.
Metinvest produces about 40 million tons of iron ore per year. The company typically exports 500,000 to 600,000 tonnes of iron ore concentrate or pellets to Europe every month, but in March its exports nearly doubled to more than 1 million tonnes.
Metinvest says its iron ore assets already account for about 40 percent of gdp by 2021. Its subsidiary, Kame Steel, currently operates about 60 percent of last year's, with iron ore reserves sufficient to meet its production. The remaining iron ore is exported by rail.
The latest news said that some of the company's steel business was under key protection in the Russian-Ukrainian conflict.
4.3 ArcelorMittal stopped production at three steel mills in Spain due to transport disruptions
Luxembourg-based ArcelorMittal has suspended production at three Spanish steel mills, Bergara, Legasa and Lesaka.
It is reported that the suspension of steel mills is mainly due to the truck driver strike to disrupt the transportation of raw materials, the company has also stopped the processing line of Gijon Steel Mills, and some factories in Aviles and Asturias have also been closed for the same reason.
ArcelorMittal's other steel mills in Zaragoza, Bilbao and Sagunto are still in normal production, but they are experiencing shortages of raw materials.
4.4 CZR Resources explores and discovers more DSO iron ore in the Rube Mesa mine in Western Australia
CZR Resources' final test results from a sample of the Robe Mesa mine in the Pirbala region of Western Australia showed that in addition to existing resources, it had also discovered more iron ore suitable for direct transportation (DSO) with an estimated annual capacity of more than 3 million tonnes.
Drilling results in the southern part of the deposit showed a new direct iron ore grading average iron grade of 55.6% and that there were many small shallow pits in the area, but the results showed that the mineralization was continuous, indicating the possibility of larger pits.
The mineralization process at this mine is similar to the Nord Rosh rice flour produced by Rio Tinto in the adjacent Mesa A and Warramboo mines, and the ore produced by Atlas Iron and Fortescue Metals Group in other areas of Pilbara.
4.5 Akora Resources publishes resource estimates for the two mining sites of the Bekisopa Iron Ore Project
Akora Resources (ASX: AKO) of Australia unveiled its Bekisopa iron ore project in Madagascar, with approximately 87.5 million tonnes of untapped resources in the northern and central regions of the project. The iron ore grade was 67.6%, exceeding the company's expectations.
Meanwhile, resource estimates are underway in the southern region of the project, with exploration targets ranging from 50 million to 100 million tonnes at grades up to 69% Fe, 2.5% Si, 1.2% Al, 0.01% P, 0.02% S and 2.5% LOI.
4.6 Alien Metals discovers high-grade iron ore ridges
Alien Metals said more potential high-grade iron ore ridges have been found in the Hancock iron ore project. The company collected 67 ore samples in the planned area, of which 25 ore samples had iron tests of more than 60% and an average ore grade of 63%, all of which were direct transportable ores (DSO).
The company said the sampling results showed the sustainability of the potentially high-grade ore area and further supported the Hancock iron ore project's determination to produce high-grade iron ore.
Initial drilling tests of Alien Metals' other Brockman iron ore project in Australia are also planned for testing in the next quarter.
4.7 The Supreme Court of India requested the position of iron ore exports from Karnataka State
On Wednesday, India's Supreme Court asked the central government to clarify whether it would allow the export of iron ore from karnataka state.
The court said the Indian government must make a decision, either agreeing to iron ore exports or using it for local demand.
In 2009, indian courts filed an application for prosecution of illegal and disorderly mining in Karnataka State, and several judges are currently considering this application. This is related to several bans on ore mining in Karnataka State that the Supreme Court has previously passed. The Supreme Court has instructed that a response be made by next Friday.
In 2011, the Supreme Court banned iron ore mining in Karnataka State and directed that existing iron ore could only be sold through auction.
4.8. India's Vedanta Limited plans to invest in the expansion of its subsidiary, ESL Steel Limited
Vedanta Limited issued a company statement on March 29 saying it would invest $348 million in the expansion of its subsidiary, ESL Steel Limited.
Vedanta Limited said the investment will increase the annual capacity of ESL Steel Limited's Bokaro plant in the eastern state of Jharkhand from 1.5 million tonnes to 3 million tonnes.
It is reported that it will build a new blast furnace, and the steel mill will also add a pipe manufacturing equipment with an annual production capacity of 18 million tons. The company said the capacity expansion will be achieved at the lowest cost.
4.9 Indian steel mills agree to provide discounts to small and medium-sized manufacturers in India
Indian Steel Minister Ram said that with the intervention of the Indian Ministry of Steel, domestic steel producers in India have agreed to offer steel supply discounts to micro and small enterprise (MSMEs) manufacturing enterprises.
The minister said domestic steel producers had pledged to offer a discount of 2,000-2,500 rupees/tonne (US$26-33/tonne) for MSMEs units. The ministry has begun negotiations with various steel industry stakeholders to develop a policy to stimulate secondary steel mills to increase special steel production.
Part 5. Market Forecast for next week
Next week, on the supply side, the end-of-season impulse of The Australian-Pakistan shipment ended in the middle of the week, and the forward supply has tightened; but according to the previous shipment rhythm and shipping schedule, the iron ore arrival volume will rebound slightly. On the demand side, next week' blast furnace has a plan to resume production and put into operation, and the blast furnace operating rate has increased, but the blast furnace affected by the epidemic has not yet fully recovered, the increase in molten iron is limited, and the demand is still at a low level this year. In terms of port inventory, the increase in arrivals is limited, and the port clearance in some areas has improved, and the port inventory is still mainly reduced.