News summary
On May 23, the main iron ore futures contract 2409 closed down 1marvelpinball.09%, current market prices fluctuated. From the perspective of supply and demand fundamentals, steel demand rebounded, inventories were depleted, and output reached a new high. Port inventories are high and are expected to be subsequently removed to the warehouse. Mineral prices are strong but under inventory pressure.
Newsletter text
[Iron ore futures showed fluctuations on May 23, closing down 1.09%]
On May 23, the main iron ore futures contract 2409 appearedmarvelpinballThere is a turbulent downward trend. Although there was a slight recovery earlier in the trading day, it eventually closed at 906.5 yuan per ton, down 1.09% throughout the day.
[Spot market prices fell, Qingdao Port iron ore prices fluctuated]
In the spot market on the same day, the external price of major iron ore decreased by US$2.5/ton compared with the previous trading day. In Qingdao Port, the prices of different grades of iron ore showed mixed ups and downs, with overall changes ranging from-9 to +2 yuan/ton. In particular, the price of 61.5% PB powder dropped by 3 yuan/ton month-on-month to 896 yuan/ton.
[Technical indicators show differentiation, and the MACD red column narrows]
In terms of technical analysis, the daily KDJ indicator of the iron ore 2409 contract has diverged, with K and J values falling, while D values maintaining an upward trend. At the same time, the red column of the daily MACD indicator began to narrow, showing changes in market momentum.
[Fundamental analysis: Steel demand declines, supply remains loose]
Fundamentally, apparent demand for the five major steel varieties declined, inventories continued to decrease, while total output hit a new high for the year. Blast furnace operating rate, capacity utilization rate and average daily molten iron output all achieved growth, setting a new high since December 2023. On the supply side, shipments from Australia and Brazil decreased slightly, while arrivals to Hong Kong increased. The overall iron ore supply remained loose.
[Inventory and price outlook: Real estate policies boost, high inventories may limit price increases]
Port inventories have begun to fall and are expected to gradually move towards the de-warehousing stage. However, as port inventories remain at high levels, this may exert some downward pressure on iron ore prices. Although steel mills replenished their stocks this week and the number of days available for inventory increased by 1 day to 21 days, the overall inventory level is still at the lowest level this year.
Market confidence has been boosted due to the positive impact of real estate policies. With the accelerated implementation of trillion-dollar treasury bonds projects, demand for construction steel is expected to gradually be released. Therefore, iron ore prices are expected to remain strong in the near future, but high port inventories may limit the room for price growth.