INDUSTRY NEWS
Iron Ore Price Trend
The 2005 iron ore contract bulls took the initiative to lighten up their positions after the price rushed up, and overseas mines basically followed the "front low and then high" rule, and there was a certain pressure on the far month iron ore price. The upside of mineral prices has been limited. It is not easy to break through the high in the current environment, and it is not meaningful to chase more.
Recently, the global spread of the new crown pneumonia epidemic has exacerbated market concerns about the future development of the economy. European and American stock markets have fluctuated sharply, and commodity indexes have also fallen significantly. However, the prices of the black varieties are relatively strong, and the current prices have rebounded to the level before the Spring Festival, and the market expectations are generally optimistic. However, the author is cautious about the current ore price. According to observations, the 2005 iron ore contract bulls have taken the initiative to lighten up their positions after the price rushed up, and the iron ore price may still be in a wide range of oscillations.
The reduction in steel production in the early stage did not cause the price of iron ore to fall, but the price of iron ore rose more than that of steel, mainly because the strength of steel prices provided confidence for iron ore bulls. Due to the impact of the epidemic, the recovery rate of the steel price spot market is relatively slow, while the prices of scrap steel are relatively firm. Short-process steel mills have insufficient profit margins for production and have a weak willingness to start. Iron ore has become the only source of iron elements at the moment. better.
However, there have been some changes in the situation. The previous transactions were mainly based on expectations. With the resumption of work at steel mills and downstream and the approaching of the contract delivery date of recent months, futures prices must face reality. Under optimistic expectations, steel mills have the right to speak in the industrial chain, and price risks can be transmitted smoothly downstream. Therefore, steel mills are generally not worried about the current "dam lake" of steel stocks. However, the pressure on the raw material side is significantly greater. If demand release is later than expected, steel mills will inevitably seek upstream profits. If the spot price of steel rises sharply, the resumption of production by short-flow mills will cause the squeezing effect of scrap steel on the long-term demand for iron ore, suppressing the upward space and elasticity of prices.
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