The meeting pointed out that the sharp rise in iron ore prices and their sustained high levels have increased the production and operational pressure on midstream and downstream enterprises, attracting high attention from all sectors of society. The state supports the healthy development of iron ore spot trading platforms, encourages relevant market entities to trade in accordance with the law, and will closely monitor changes in spot trading prices, promptly investigate abnormal trading and malicious speculation behaviors, and impose severe penalties and public exposure for actions such as forming monopoly agreements, spreading price increase information, price gouging, and hoarding, in order to maintain a good market order.

As soon as the news broke, iron ore futures fell sharply. As of 3 PM today, iron ore futures had dropped by 108 yuan/ton, a decline of 8.79%. Market sentiment has been significantly affected, and changes in raw material factors have ultimately led to a decline in the entire black series industry.

In terms of supply, the previously closely watched shipments from Rio Tinto have begun to show a recovery trend. Although the total global shipment volume has not fluctuated much, the supply volume has started to increase. According to relevant data, the total shipment of iron ore from Australia and Brazil is 26.135 million tons, an increase of 1.111 million tons compared to the previous period, which is higher than this year's weekly average of 2.359 million tons. The arrival volume at 45 ports in China is 22.117 million tons, an increase of 1.614 million tons compared to the previous period.

In terms of demand, the industry has entered the off-season since June, and due to the impact of production restrictions, steel mills are mostly in maintenance operations. From the continuation of blast furnace maintenance last week and the new blast furnace maintenance this week, the operating rate of 247 steel mills' blast furnaces is 80.21%, a decrease of 0.13% compared to last week (June 13-20, 2021), and a year-on-year decrease of 11.33%. The average daily pig iron output is 2.4401 million tons, a decrease of 0.05 million tons compared to the previous period, and a year-on-year decrease of 2.62 million tons. The average daily pig iron output is expected to continue to decline, with demand continuing to shrink, indicating a trend of strong supply and weak demand in the iron ore fundamentals.

In terms of inventory, last week the total iron ore inventory at 45 ports in China was 120.8875 million tons, a decrease of 2.7842 million tons compared to the previous week. The average daily outflow volume is 3.0053 million tons, an increase of 0.0224 million tons compared to the previous week. Currently, the number of vessels in port is 145, an increase of 3. Iron ore inventory has shown an increase, and port inventory has also increased.

In terms of the market, affected by the announcement of the joint research, market sentiment is sluggish, and it may be difficult to see significant changes in the short term. Additionally, downstream demand is shrinking, and steel mills are reducing their purchasing operations.

Source: National Development and Reform Commission, Business Society