In december, the spot end of the game sentiment is strong, in the winter replenishment of the large cycle, as the first quarter of 2020 macro expectations continue to improve, coupled with higher spot costs, traders generally appear price behavior, the overall price shock is strong.
In december, due to the closure of the two ports in tangshan, the volume of port openings fell significantly, but the overall accumulation of port inventory was limited by the combined impact of high demand from steel mills and lower short-term arrivals. ? In the future, the high probability of arrival in Hong Kong increases first and then decreases. In the expectation that demand is still good, it is also difficult for future port stocks to accumulate substantially.
Currently, shipments in both parts of australia and bakistan have fallen, with some problems in australia's own production in addition to the impact of routine maintenance, while brazil is responsible for its extended domestic ore-mixing cycle and intended delays in shipments.
Australia has entered the hurricane season, and brazil's ability to produce and sell has been questioned, and the short term remains the main target of observation.
From the production point of view, most parts of the country have completed seasonal production reduction, but because of the high level of ore prices this year, some mines are still in production, so the total inventory has returned to the reverse season.
At the end of the third quarter, the forward premium became an important support for spot prices, but after entering the fourth quarter, the supporting role of structural contradictions was replaced by the logic of replenishment, and there was a contradiction that the forward premium was declining and the price of recent months was firm. There is reason to believe that this result is attributable to an increase in forward supply and a decrease in forward demand.
In December, largely under the influence of blast furnace profits, the compound production and blast furnace coefficient increased, and the production of hot metal increased by 3.18 million tons. Since it is still under the influence of the winter production limit, the overall molten iron increment is inhibited.
The current stone fundamentals are still good, in the context of the expected resilience of demand, the end of january to deliver on previous shipments, superimposing the emotional impact of the australian hurricane, before the complete completion of the replenishment, the overall price will be relatively strong. On the other hand, it is now the best stage of iron ore, short-term rigid replenishment, the contradiction support of high demand expectation and low supply before the second quarter, the incremental bottleneck of non-main ore and inner ore, and the short-term holding of more ideas to treat it. Logically, the supply and demand of the May contract is greater than the September contract, so the valuation premium for the September contract may be too high.
It is important to note that the forward premium, as an indicator of future changes in supply and demand, is at a declining level, always suggesting the risk of spot fundamentals that need to be added to the continuous observation.