Iron ore imports to China in the first week of November 2023 have significantly increased, reaching 149.13 million tons at 35 major ports across the country. This increase of 1.08 million tons compared to last week indicates sustained demand in the market. Despite this increase, the volume of imports to the ports has experienced a significant decline this week, but inventory levels are still gradually rising.
Price Analysis and Trading Activity
The price of iron ore futures on the Dalian Commodity Exchange (DCE) rose by 0.07% compared to the previous day, reaching 687.5 yuan per ton. However, cash prices for major products at the port of Qingdao have decreased by an average of about 3 yuan per ton. Trading activity in this sector has been moderate, and requests from steel mills are limited. Overall, cash transactions in this market remain weak.
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Demand and Production Developments
According to SMM statistics, the average daily volume of withdrawals at 35 major ports in China has decreased to 3.12 million tons, showing a decline of 55,000 tons compared to last week. The production of molten iron in steel mills has also decreased, and cargo withdrawals from the ports have weakened. It seems that the initial driving force for price increases in the form of the correction of sellers' positions is gradually diminishing, and the pressure from inventory levels is also affecting prices.
In the short term, iron ore prices are expected to continue stabilizing at high levels, reflecting a decrease in the optimistic outlook from yesterday. Attention to port input trends and changes in steel mill inventories is of high importance.
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