The iron water price continued to decline, inventory accumulated, and the fundamentals of iron ore remained relatively loose. The main contract opened lower and moved lower throughout the night trading session. However, it rose in tandem with the CSI index in the morning session, with the decline narrowing to 0.19% and closing at 794 yuan per ton.

Currently, it is the off-season and the profit situation of steel mills is still deteriorating. The blast furnaces of steel mills are also continuing to reduce production. This week, the profit rate of 247 steel mills continued to decline by 2.6% to 35.06%, reaching the lowest level since October last year. Compared with last year, it decreased by 16.89 percentage points. The operating rate of blast furnaces decreased by 1.1% month-on-month to 81.09%, and the utilization rate of blast furnace iron-making capacity dropped by 0.6% to 87.97%. The daily output of molten iron continued to decline by 16,000 tons to 234,680 tons, an increase of 8,100 tons compared to last year.

With the continuous arrival of overseas iron ore at the ports, although the daily throughput of iron ore at the ports rose to 3.44 million tons this week, the highest level since October, the port inventories have soared significantly. The inventory of imported iron ore at 47 ports across the country increased by 166.37 million tons or 1.06% compared with the previous week, reaching 159.0122 million tons, breaking the one-year high and reaching the highest level in the past four years during the same period. The number of ships at the ports decreased by 8 to 115. In the short term, we will continue to pay attention to the situation of structural disturbances in some varieties. However, due to the increase in iron ore prices suppressing the purchasing enthusiasm of steel mills, the inventory of imported iron ore in steel mills decreased by 58.75 million tons compared with the previous week to 89.4248 million tons, reaching a one-month low and a new low in the same period since the record was set. The inventory-sales ratio increased by 0.04 days to 30.9 days, which is lower than the levels in previous years. We will pay attention to the process of steel mills' replenishment in the future.

The demand for the terminals has shown seasonal weakness, and the actual situation remains weak. The inventories of the five major steel products continued to decline by 2.25% this week to 1400.81 million tons, reaching a three-and-a-half-month low. Meanwhile, the output increased by 0.68% to 855.71 million tons, while the apparent demand slightly decreased by 0.69% to 888 million tons, still higher than the same period last year. Zhengxin Futures suggests that the marginal supply and demand of iron ore have begun to weaken this week. The loose expectations resulting from the US interest rate cut support the continuation of the rebound in iron ore prices, but considering the drag effect of the off-season steel production, it is expected that the iron ore prices will still have room for a correction. Strategies: Aggressive investors can consider the idea of shorting with a light position.

 M-q-news.wenhua.com.