The weaker spot price of iron ore follows the fall
Release Date:2018-11-22       Number of hits:427       

The slight gains in the last trading day of the week did not change the weakness of iron ore futures, which have been falling all the time. China Securities News reported that the recent iron ore futures prices have fallen by more than 21 %. Some people in the industry pointed out that in the spot market, a small number of small traders have increased pressure on the cost of funds, and there are operations that sell their own spot resources at low prices, dragging down the cliff decline in spot prices and driving futures down. Looking ahead, iron ore futures still have room for decline.
Iron ore futures continue to weaken
As of Friday's close, Dalian Iron Ore Futures, the main 1709 contract, closed at 512 yuan per ton. Since March 17, the contract has accumulated a decline of 21.71 %.
Spot prices fell 8.5 per cent on April 12 to a five-month low of $68.04 a tonne, the biggest one-day drop since March 9, 2016. According to the data provided by Founder's medium-term futures, on April 14, the market prices in the main production areas of domestic mines continued to fall, and the trading volume of the import mine market was acceptable. The price also continued to innovate. Tangshan 66 % dry base tax cash factory 720-730 yuan/ton, a decrease of 20 yuan/ton; Qian 'an 66 % dry base tax cash paid 720-730 yuan/ton, a decrease of 20 yuan/ton; Zunhua 66 % dry base tax cash factory 710-720 yuan / ton, a decrease of 20 yuan / ton.
In the maritime market, sea freight continues to rise. The latest data shows that the Brazil-China Sea freight rate was US$ 14.842 per ton, an increase of US$ 0.321 per ton; Freight from Western Australia to China increased by $0.242 per ton at $6.592 per ton.
For the iron ore price of the weak market, some industry insiders revealed that a small number of small traders have increased the pressure on the cost of funds, there are low prices to sell their own spot resources, drag down the spot price has a cliff decline.
Founder medium-term futures pointed out that due to the high cost of pre-purchase powder mines, in order to reduce the cost of raw materials to increase profits, steel mills have recently increased the amount of low-priced resources purchased, but the downstream shipment of finished materials has not improved, and prices have continued to fall sharply, so the black system fell into panic. Selling phase.
The bank's previous report also made it clear that the rise in iron ore prices was unsustainable. The bank pointed out that China's move to eliminate backward production capacity and change the way the economy develops will put an irreversible pressure on iron ore demand. At the same time, the market also believes that the Brazilian and Australian mines are expected to further expand supply.
Back market or still empty
Looking forward to the city, Founder's medium-term futures believe that steel(2973, 22.00, 0.75 %) exports fell by 24.2 % in March, while ore imports increased by 11.4 %, real estate regulation and upgrading, auto production and sales were weak, and iron ore supply and demand were weak. The long-term downward trend is difficult to ease. Iron ore futures 1709 contract pressure 5 daily line fell, the short-term downward trend was eased, but insufficient momentum, operating to maintain a short-term thinking.
Huawen Futures also believes that if steel continues its current pattern in the later period, iron ore prices still have room for decline. Iron ore is the weakest link in the fundamentals of the black industrial chain, and with the decline of steel profits, the premium of high-grade products has fallen. In the later period, as profits continue to be compressed, there is still room under the premium from the point of view of cost-effectiveness. The structural contradiction of iron ore and the increase in supply are gradually released, and the later period will show a downward trend of shock and a gradual downward trend of focus.
In addition, Axiom Capital Management Inc., which has long been bearish on iron ore trends. ) Also in a study on April 10, it was "ripe" to bet on a drop in iron ore prices. In its view, expectations of increased iron ore supply and Chinese port stocks could trigger a sell-off.
Goldman Sachs, the international investment bank, also believes it is expected to fall to $60 a ton in the third quarter of this year as global supply remains strong and the outlook for the iron ore market is bearish.