The average profit margin for imported iron ore in China has reached 0.04 Yuan per ton, indicating a significant decrease from 8.72 Yuan per ton in previous periods. This decline is primarily due to the drop in spot prices at ports and the increase in transportation costs.
Supply and Demand Situation
Companies active in the iron ore industry are facing challenges including increased supply and decreased demand. The latest published data shows that iron ore inventory at 35 major ports in China has reached 148.05 million tons, which is an increase of 300,000 tons compared to the previous survey. Additionally, the daily output volume at the ports has decreased to 3.175 million tons, indicating a reduction in demand.
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Price Outlook
It seems that the fundamentals of the iron ore market are currently bearish. Given the forecast for a decrease in pig iron production next week, demand for iron ore may continue to weaken, which could negatively impact prices. Currently, macroeconomic factors are also not strong drivers for prices, and prices are expected to remain within a stable range next week.
Furthermore, negotiations regarding long-term contracts and environmental production restrictions in northern China may continue to affect prices. It appears that the import margin is gradually decreasing in the short term, as transportation rates are on the rise.
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