Part A: Review (2018/10/15-2018/10/19)

From October 15, 2018 to October 19, 2018： the closing price of iron ore futures I1901 contract on Friday was 515 yuan, same as the closing price of the last trading day of last week. The highest price for this week is 532 yuan/ton, and the lowest point is 504 yuan/ton. This week (2018/10/15-2018/10/19), the total volume of I1901 contracts was 4,631,126 lots, an increase of 827,200 lots from last week. After the close of trading this Friday, open interest was 626,924 lots, a decrease of 43,994 lots from the last trading day of last week.


Part B: Market Dynamics

1.Inventory

(1) Port stock of imported iron ore Under the background of the country's policy of increasing environmental protection and production limits in various regions, the blast furnace start-up of steel mills has been suppressed. In order to increase the production capacity per unit, steel mills' demand for high-quality mines has gradually increased. According to the inventory data of 45 ports of My steel, as of October 19, the inventory of imported mines at 45 ports was 145.28 million tons, an increase of 1.75 million tons from last week. Among them, the Australian mine inventory was 83.5147 million tons, down 589,600 tons from last week; the Brazilian mine inventory was 31.6587 million tons, up 2.3618 million tons from last week. It can be seen that Brazil's high-quality mine inventory is at a low level, and Australia's low- and medium-grade mines are at a relatively high level. Therefore, the contradiction between low inventory and high demand of high-quality mines has pushed the price of 65%-grade Brazilian Carajas sinter feed to continue to rise, and the price of 61.5%-grade of Australian PB fines has oscillated at a low level, with a small increase. The stock of lump ore was 16.83 million tons, a decrease of 892,800 tons from last week; the inventory of pellets was 2,276,700 tons, an increase of 39,300 tons from last 2 week; the inventory of iron concentrate was 7,951,300 tons, a decrease of 342,600 tons from last week.

(2) Available days of steel mill inventory As of October 19, the average available days of imported iron ore stocks in domestic large and medium-sized steel mills was 32 days, an increase of 7 days from October 5.

2. Capacity utilization rate This week, Mysteel surveyed 247 steel mills with a blast furnace operating rate of 80.37%, down 0.47% from the previous week and down 2.67% year-on-year; blast furnace ironmaking capacity utilization rate was 82.04%, up 0.11% from the previous week and up 0.28% from the previous year; Steel mill profit rate is 91.50%, which was flat; the daily average molten iron output was 2,294,100 tons, an increase of 3,100 tons from the previous week and a decrease of 32,700 tons year-on-year.

3. Steel mill profit margin It is estimated that the rebar gross profit of steel mills in Tangshan City, Hebei Province, has fluctuated around 900-1000 yuan/ton in the past two months.

4. National Bureau of Statistics of China The data released by the National Bureau of Statistics of China on Friday shows:

(1) pig iron China's pig iron production in September was 66.38 million tons, an increase of 4.4% over the same period last year; China's pig iron production from January to September was 577.86 million tons, an increase of 1.2% year-on-year.

(2) crude steel China's crude steel output in September was 80.85 million tons, an increase of 7.5% over the same period of the previous year; China's crude steel output from January to September was 699.42 million tons, an increase of 6.1% year-on-year.

(3) Steel China's September steel output was 96.75 million tons, an increase of 9.8% over the same period last year; China's steel output from January to September was 821.01 million tons, an increase of 7.2% year-on-year.

5. Market outlook 3 Steel mills will start production reduction mode, and Beijing-Tianjin-Hebei, Shanxi and Shaanxi, and Yangtze River Delta regions will continue to implement staggered production. The ratio of production reduction is difficult to significantly relax, so the demand for iron ore is not strongly supported.It is recommended to pay attention to the actual situation of steel mills reducing production during the heating season,iron ore prices are expected to remain under pressure，there may be opportunities to short iron ore. Staged supply and demand changes come from the replenishment of steel mills, the risk of a sharp rise in iron ore prices comes from the rapid depreciation of the RMB.


Copyright by fangquant.com