End of madness!Iron ore fell another 24% in August. Can

Since the beginning of 2015, iron ore began a long climbing journey, 2021 is the peak, in May this year, the main contract of iron ore reached a historic high of 1358 yuan/ton, compared with the low on April 2 last year, an astonishing rise of 150%!The huge cost pressure on Chinese enterprises, which import most iron ore, has also attracted the attention of people from all walks of life.Fortunately, the "crazy rock drama" ended at the end of July!

After an elevator ride down, iron ore prices are now 43% below their All-time high on May 12 and 24% lower in August alone.Iron ore hit a monthly low of 735 yuan/ton on August 20, also the lowest since early July 2020.

On August 5, iron ore fell from a cliff, not only falling below the 1000 yuan mark, but also falling below the 900 mark, starting a nearly two-week shock drop.On the one hand, the crude steel reduction production continues to advance, most steel companies said they will gradually implement the reduction task, negative sentiment over the market, on the other hand, considering the weak downstream demand for steel terminal, some steel companies have planned to reduce raw material inventory, making the iron ore market pressure increased pressure.Until August 20, iron ore stopped falling and slightly recovered, and began to recover at the end of August, but after September, iron ore futures fell again.

Recently, guangxi energy consumption double control upgrade, and according to SMM, BW Group was required to complete the annual crude steel output before November not exceed last year's target, the market for iron ore demand side concerns again rose, dragging iron ore sharply down.In the fundamentals of further easing, in the short term, the mine price is still weak operation;But the subsequent need to pay attention to wood demand warming speed, or the existence of support effect on the mine price.

Looking ahead to September:

SMM expects that after overfalling in August, the price of imported ore may stop falling and stabilize in September, but in view of the large background of production reduction and limit, the demand side remains low level, the rebound space is limited.It is expected that the average price of imports in September compared with August has a small space to pick up.From the supply side, according to the data of outbound cargo volume tracked by SMM from Australia and Brazil, the outbound cargo volume from Australia in the recent two weeks remained at 17.07 million tons/week, increasing by about 3.9%.The outbound volume of Brazil in the last six weeks remained at 6.7 million tons/ton, down 2.9% from the previous month. The outbound volume is expected to remain stable.In addition, considering the decline of port operation efficiency due to overseas epidemic factors in the early stage, the port inventory accumulation speed may slow down with the improvement of port efficiency.

From the demand side, under the background of production reduction and limit, pig iron production in August fell from the previous month, while steel mills were more cautious in iron ore procurement and maintained low inventory operation.And, in September production limit is expected to continue to normalize, the demand side of the mine price support strength is limited.However, considering the material "gold nine silver ten" expectations, and in the middle and late September, some steel mills or the existence of raw materials before the National Day replenishment operation.In addition, coke has opened the ninth round of rise, steel mills for the mainstream medium and high quality ore demand is still expected, so there is a certain range of support for the mine price.