Part A: Review (2019/1/14-2019/1/18)

From January 14, 2019 to January 18, 2019:the closing price of iron ore futures I1905 contract on Friday was 528 yuan, 19 yuan higher than the closing price of the last trading day of last week. The highest price for this week is 530 yuan/ton, and the lowest point is 504 yuan/ton.

This week (2019/1/14-2019/1/18), the total volume of the main contract was 5,095,394 lots, an increase of 1,113,894 lots from last week. After the close of trading this Friday, the open interest of the main contract was 992,292 lots, a decrease of 159,094 lots from the last trading day of last week.

Notes: The main contract refers to the futures contract with the maximum open interest.

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 Mysteel, as of January 18, the inventory of imported mines at 45 ports was 143.73 million tons, an increase of 1.91 million tons from last week.

Among them, the Australian mine inventory was 75.96 million tons, up 35,900 tons from last week; the Brazilian mine inventory was 37.25 million tons, up 1,407,700 tons from last week.

The stock of lump ore was 15.13 million tons, a decrease of 431,200 tons from last week; the inventory of pellets was 4,010,200 tons, an increase of 48,500 tons from last week; the inventory of iron concentrate was 7,979,300 tons, an increase of 614,800 tons from last week.

(2) Available days of steel mill inventory

As of January 11, the average available days of imported iron ore stocks in domestic

large and medium-sized steel mills was 30 days.

2. Capacity utilization rate

This week(2019/1/14-2019/1/18), Mysteel surveyed 247 steel mills with a blast

furnace operating rate of 75.84%, up 0.81% from the previous week; blast furnace ironmaking capacity utilization rate was 76.45%, up 0.04% from the previous week and up 0.87% from the previous year; Steel mill profit rate is 78.54%, up 0.81% from the previous week; the daily average molten iron output was 2,138,000 tons, an increase of 1,100 tons from the previous week and an increase of 24,300 tons year-on-year.

Part C: Transaction Summary

Since 2018/3/26 and up to 2019/1/18 closing, China iron ore futures’ cumulative trading volumes is 363.28 million lots and the cumulative amount of transaction is 17.03 trillion yuan.

Average daily turnover of 1,798,396 lots (2018/3/26-2019/1/18). Open interest declined steadily, with 2,224,492 lots on 2018/3/26 and 1,291,844 lots after the closing of 2019/1/18.

Because DCE raised the delivery quality standards for iron ore futures at the end of 2017, the volume and open interest of iron ore futures showed a downward trend.

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