Policy Overview
Go long iron ore 1905 contract. According to our analysis, the demand for iron ore is stable, the 1905 contract price is low, and the security boundary is high. The stop loss line is set at 465.00-480.00 yuan/ton, and the target range is 495.00-520.00 yuan/ton. The operating range is 480.00-500.00 yuan/ton.
factor analysis
1. In terms of supply, the overall output and delivery of mainstream mines declined in the third quarter. With the production plan unchanged this year, the output is expected to increase in the fourth quarter. The overall planned shipment volume of mainstream mines in the fourth quarter is about 300 million tons, 10 million tons more than that in the third quarter. However, the fourth quarter has always been a slack season for domestic consumption. Demand will be less than that in the third quarter, and supply and demand will be relatively loose. However, according to the recent shipment data, the shipments of Australia and Brazil have declined, and the arrival volume has not increased too much. The expectation of loose supply has not been realized in the short term.
2. In terms of demand, the production of steel mills is still strong, and the production restriction is relatively loose this year. Although the sales boom of real estate is difficult to last for a long time, it is still supported in the short term due to the financing demand. It is expected that the steel demand space in the later stage will be greatly affected by the real estate.
Risk Management
1. The demand is not as expected.
2. The iron ore is dragged down by the weakness of the finished product end.
3. Risk aversion is rising.
1、 Market review
Last week, iron ore recovered after a sharp correction. At the end of last week, the main iron ore contract closed at 525.00 yuan/ton, up or down 3.24% weekly, with 30000 more trading volumes and 130000 more positions.
Figure 1 Continuous iron ore (yuan/ton)
Data source: Wind, Guodu Futures Research Institute
Figure 2 Trading volume and position of main iron ore contracts (hand)
Data source: Wind, Guodu Futures Research Institute
2、 Fundamental analysis
In the third quarter, the overall output and delivery of mainstream mines declined. With the production plan unchanged this year, the output is expected to increase in the fourth quarter. Specifically, the iron ore output of Vale in the third quarter totaled 104.9 million tons, an increase of 8.1 million tons compared with 96.8 million tons in the second quarter, and a year-on-year increase of 9.8 million tons. The sales volume of iron ore and pellets also reached a new high, totaling 98.2 million tons. It is expected to deliver about 100 million tons in the fourth quarter. The annual output target in 2019 is maintained at 400 million tons, and the output in the first quarter is planned to increase by 9%. Rio Tinto's iron ore output in the third quarter was 82.5 million tons, 3% lower than that in the second quarter, and the output in the fourth quarter was planned to be about 90 million tons. The total output of BHP iron ore in the third quarter of 2018 was 69.342 million tons, 2.803 million tons less than that in the second quarter, and 5.06 million tons more than that in the third quarter of last year. BHP Billiton expects to have a production plan of about 70 million tons in the fourth quarter of 2018. FMG's output in the third quarter totaled 42.9 million tons, down 2.72% month on month; The sales volume of finished products dropped 13.55% month on month by 40.2 million tons. The annual output of FMG in 2018 is planned to be 170 million tons. After calculation, the production in the fourth quarter is about 45 million tons.
Overall, the overall planned shipment volume of mainstream mines in the fourth quarter is about 300 million tons, 10 million tons more than that in the third quarter. However, the fourth quarter has always been a slack season for domestic consumption. Demand will be less than that in the third quarter, and supply and demand will be relatively loose. However, according to the recent shipment data, the shipments of Australia and Brazil have declined, and the arrival volume has not increased too much. The expectation of loose supply has not been realized in the short term.
Last week, the iron ore port inventory was 142818700 tons, 755300 tons less than the previous value. Last week, port arrivals increased, Brazil shipments decreased, and Australia shipments increased. The port sold 335000 tons, and the spot market recovered. Recently, a train full of iron ore at BHP ran for 92 kilometers without a driver, and it didn't stop until it was forced to derail. The train was forced to derail, resulting in the damage of 1.5km long railway track and the shutdown of iron ore. It is expected that BHP will reduce the delivery, and the supply of PB powder is still in short supply. BHP expects that it will take about a week to repair the track and resume transportation. The national blast furnace operating rate rose slightly, and the steel plant production was still strong. This year's production restriction was relatively loose, and the demand for iron ore would not be greatly depressed. Last week, the iron ore inventory days of the steel plant continued to rise to 29.1, and the steel plant's enthusiasm for stocking increased.
Figure 3 General 62% Price Index
Data source: Wind, Guodu Futures Research Institute
Figure 4 Iron Ore Swap Settlement Price of Singapore Exchange
Data source: Wind, Guodu Futures Research Institute
Figure 5 Weekly data of port inventory (10000 tons)
Data source: Wind, Guodu Futures Research Institute
Figure 6 Marine trade volume of the month (10000 tons)
Data source: Wind, Guodu Futures Research Institute
Figure 7 Inventory consumption ratio of imported sinter fines
Data source: Wind, Guodu Futures Research Institute
Figure 8 Spot Price of Iron Ore at Qingdao Port
Data source: Wind, Guodu Futures Research Institute
3、 Future prospects
The weak macro environment in the near future has led to a downward trend in domestic investment and consumption expectations, but the steady rise in real estate construction and new construction data has supported the steel market. At the raw material end, the derailment of BHP trains has a certain impact on supply. The delivery level in Brazil has declined, and the steel mills have started to rise. The production is still strong, and the steel mills have increased procurement. The supply and demand of iron ore is stable, and the trend is relatively strong. However, if other varieties in the black plate maintain a downward trend, the iron ore also lacks motivation to rise. If the whole black plate can stop falling, iron ore is expected to increase.
Guodu Futures Team 2
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Editor in charge: Song Peng
