Iron ore futures price follows steel price

Last week, the main contract futures price of iron ore fell with the steel futures price, with the highest price of $80 / ton. On the one hand, after the contradiction between supply and demand of iron ore weakened, the pricing power returned to the demand side again, the rise and fall of steel price and the impact of steel mill procurement rhythm intensified. Last week, the sharp fall of finished steel products price led to the increase of raw material price volatility; on the other hand, the overall situation of iron ore shipment in Australia and Brazil was stable, in which the shipment volume in Australia rose in shock, but Brazil continued to protect with the middle and low level of shipment, the demand side profit rebounded significantly, releasing certain replenishment demand.

Looking forward to the future, the trend of the overall stability of foreign mainstream mine transportation is unchanged, and the seasonal transportation volume of Australian mines is increasing. According to the change of sea freight from Brazil to Qingdao, in December, the situation of Brazil's mine arrival in port was still not optimistic, the impact of Vale dam break accident was still ongoing, and the increase of short-term shipment was relatively limited. According to the historical shipment data of Australia, there is an increasing trend of seasonal shipment in Australia. In terms of the shipment period from Brazil to China, the current shipment volume in Brazil has little pressure on the supply of iron ore 2001 contract. On the whole, the port inventory pressure is lower than expected, and the estimated futures price of iron ore 2001 contract is 75 US dollars / ton to 80 US dollars / ton.

In terms of demand, steel mills have a high enthusiasm for production under the stimulation of high profits, with port dredging volume at a high level over the same period of the previous year, and pig iron production remains at a high level this year. In the short term, the fall of steel prices has little impact on long-term production, and the demand for iron ore is still guaranteed.

On the whole, the supply and demand of iron ore is relatively balanced in the short term, and the high profits of the black industry chain provide support for the price of raw materials. This week, iron ore prices are expected to follow steel prices.