Iron ore structural contradictions are still expected in July some of the mainstream variety prices still have support

In June, due to the influence of overseas weather and epidemic disease, the structural problems of the main imported ore varieties have not been completely solved, driving the port spot prices still have support;In the second half of the decade, the National Development and Reform Commission again sounded for iron ore price intervention, even iron plate once close to the limit.According to the spot data of SMM port, in June, the average price of middle and low grade mainstream ore in Shandong decreased slightly month-on-month, while the price of high grade mainstream ore was still rising.In the first half of the year, iron ore prices rose first and then depressed.According to the spot price of SMM iron ore ports, 61.5% Qingdao Port PB powder reached the highest price of the year at 1670 yuan/ton in early May, up more than 56% from the lowest point at the beginning of the year.After that, under macro-control, mine prices gradually fell.The near future continues to hover at 1480 yuan/ton shock.

Considering that after the party's 100th anniversary celebration in early July, the production limit wave has weakened, and the "double carbon" action in the short term is difficult to effect, and the steel mill charge structure adjustment is expected to be limited, SMM is expected in July some mainstream ore prices still have support;However, it is still necessary to pay attention to the effect of seasonal change on iron ore conduction.

On the demand side, the utilization rate of domestic blast furnaces tracked by SMM dropped 0.7% to 84.9% month on month again. In June, the profit of steel mills declined seriously, and some steel enterprises started the maintenance cycle one after another, which led to a further decline in the utilization rate of blast furnaces.In addition, according to the SMM210.55 gold mine estimate, the domestic long process steel rebar profit has been below the cost, and the hot rolling profit also decreased 460 yuan/ton from the same period last month to 295 yuan/ton;Steel mill profit decline for raw material procurement slow pace.Some steel enterprises report that the adjustment period of the burden ratio of their blast furnace has been adjusted from 7-10 days to about 5 days. However, because some kinds of steel in the steel mill still have profits, the demand for low grade ore has not been significantly improved.

In terms of supply, SMM tracks the outbound cargo volume of Australia and Brazil. According to SMM, the outbound cargo volume of Australia in recent two weeks has increased by 9.4% to 18.6 million tons/week, while that of Brazil in recent six weeks has increased by 11.8% to 6.81 million tons/week. In addition, the domestic port inventory of imported mines is expected to start the trend of inventory increase in the near future after four consecutive periods of decline.There is some upward pressure on iron ore prices on the supply side.However, taking into account the steel mill furnace material structure has not been significantly tilted, the mainstream of high quality ore prices in the short term space is limited.

In terms of inventories, as of June 25, inventories at 35 ports tracked by SMM totaled 114.26 million tons, slightly down 110,000 tons from last week and up 13.6 million tons from last year.In this period, the average daily port opening volume continued to decline by 42,000 tons to 2.713 million tons.In this period, the quantity of imported ore arriving at Hong Kong has decreased from the previous quarter, and some steel mills have slowed down the procurement pace of imported ore recently under the dual pressure of declining profits and environmental protection limit production.In particular, Tangshan has seen a significant decline in the port arrivals. Although the local production restriction policy has been strict recently, the inventory of the two main ports in Tangshan has decreased by about 3.18% month-on-month.Considering the influence of the 100th anniversary of the founding of the Communist Party of China, it is difficult to release the expected production limit in the short term, and the port inventory is expected to start the potential increase.