Iron ore prices hit record single-day gains in history

According to reports, the 62% grade iron ore CIF price sent to Qingdao Port of China soared by 19%, the largest intraday gain since records reached in 2009, to US$63.74 per ton.

Monday night domestic domestic market, including hot rolled coils, rebar, iron ore, etc., a variety of black series ** varieties limit the opening.

During the day, the price of iron ore ** listed and traded in Singapore soared by 21% to $60 per ton. The price of iron ore ** on the Dalian Commodity Exchange in China was limited at the opening of the market on Monday, and was closed daily to close at a daily limit of 407 yuan per tonne, the highest since June 11 last year. The ** contract hit the market for the first time on Friday night trading hours.

Affected by this, the price of steel ** in the inner plate also rose sharply. The Shanghai ** Exchange rebar ** main contract 1605 closing up 5%, to 2073 yuan per ton, the highest closing price since August 17 last year.

In the short term, this is mainly due to the bullish atmosphere of the market and the expectation of the Chinese steel mills' plans to increase production in the short term.

Tangshan City, Hebei Province, China's steel producer, plans to hold a world horticultural exposition from April 29th to October 16th. The market generally expects that during the expo, the local government will order steel mills within its jurisdiction to cut production to reduce air pollution. According to past practice, steel mills may increase production before a decree is issued.

According to "My Steel Network", Tangshan Steel Association recently released the "World Horticultural Exposition Environmental Quality Assurance Measures (Draft)", the draft limit production measures are quite strict. The draft stipulated that during the Fair, steel mills could only produce 50% of the days for 36 days. In addition, different atmospheric warning measures should be implemented according to weather conditions.

“The market may also have the potential to cover short positions today,” said Xuhuiim, an analyst at Huatai Securities. “The mad increase in iron ore ** has surprised traders and steel mills because they have not yet seen a corresponding spot order. increase."

Reuters quoted CRUGroup analyst WangDi as saying, "I think that the popularity of the market has also played a role in pushing up prices to some extent."

The once depressed iron ore market has skyrocketed since early February, causing widespread market attention. Driven by the steel production capacity and stimulation of real estate policies, the overall situation of the steel industry has recently improved, and commodity prices represented by steel, coal, and iron ore have experienced a strong rise in the last three months, forming overall confidence in the market. Boost.

The international iron ore price has rebounded by more than 20% year-to-date so far, and has rebounded by more than 40% from the record low of 38.30 U.S. dollars per ton set in December last year. In the previous three years, it has plummeted by 70%. The cumulative increase of the DCE iron ore** contract in the first two months of this year has exceeded 25%.

Zhao Chaoyue, an analyst with China Merchants, previously told Bloomberg that “the iron ore and steel market has gone crazy and deviated from the fundamentals, mainly driven by market sentiment. Investors expect the Chinese government will withdraw from more monetary easing measures to stimulate Economy, which will boost steel demand."

Analysts Xu Hanfei and Zhang Li of Guotai Junan Securities analysts said that the recent skyrocketing price of cyclical products has two important reasons: First, the asset demand caused by excess liquidity rises, and the “asset shortage” is reflected in the first-line real estate market. ) This is a sharp rebound in house prices; second, the short-term “fundamentals” of industrial raw materials brought about by restocking have improved, leading to a sharp rebound in commodity prices.

However, although iron ore is one of the largest commodity prices rebounded this year, Goldman Sachs still maintains its bearish view. WangDi said that although the actual demand for steel has increased compared to winter, “no significant changes have occurred.”

Goldman Sachs also said that as China’s iron ore consumption country China’s steel demand has not improved significantly, and steel materials will once again drive steel prices, not the other way around. “Either in the order book of individual steel producers or in the official new orders data, we have not found any evidence that the demand for steel is higher than expected. Therefore, the trend of rising iron ore prices will not continue, and the rebound will be short-lived. ."

Goldman Sachs analysts ChristianLelong and AmberCai predicted in their research report on Monday that iron ore prices are expected to be US$43/ton during the quarter, US$38 in the second and third quarters, and US$35 in the fourth quarter.