Iron Ore and A-share Market Weekly Report and Global Capital Market Weekly Report 20240325
Overall
• Recently, there has been a decrease in the amount of scrap arriving, causing steel mills to face the possibility of increasing iron production. However, steel stocks are still at a high level, so they are still under greater inventory pressure. Although there is a recovery in demand for molten iron production, this also needs to be supported by further improvements in steel production and sales. Looking at the short term, current port stocks are high, which will continue to have a depressing effect on mineral prices. Although there is an upward trend in molten iron production, the pattern of weak demand for iron ore has not fundamentally improved. $SSIF DCE Iron Ore Futures Index ETF(03047.HK$
On the supply side
• Total global shipments were 28.35 million tons, with a weekly decrease of 2.87 million tons, Australian shipments of 15.67 million tons, a weekly decrease of 3.29 million tons, Brazilian shipments of 6.41 million tons, and a weekly increase of 140,000 tons.
• Due to the impact of the hurricane in Western Australian waters, global ore shipments declined during the current period. However, with the exception of mainstream mines in Australia and Brazil, shipments from other non-mainstream mines continued to pick up and reached the next highest level during the year.
Demand side
• The operating rate of blast furnaces in 247 steel mills was 76.9%, up 0.75% from last week, down 5.83% from last year; blast furnace iron production capacity utilization rate was 82.79%, up 0.21% month on month, down 6.49% year on year; steel mill profit ratio was 22.94%, up 1.73% month on month, down 35.93% year on year; average daily iron and water production was 2,213,900 tons, up 0.57 million tons year on month, down 184,300 tons year on year.
• Domestic steel companies have begun to increase iron and water production this week, but the increase in production has not met expectations. Considering steel companies' plans to resume production, it is expected that more companies will concentrate on resuming production within the next one to two weeks. However, since the increase in iron and water production in the past five weeks has not met expectations, and the current profit balance of steel companies is still in a tight balance, there is still a risk that the increase in iron water production will not be achieved as scheduled.
In terms of inventory
• Imported iron ore stocks in 45 ports across the country were 143.66 million tons, an increase of 810,000 tons over the previous month.
This week's A-share weekly report:
1. The popularity of market transactions continues to rise, and the popularity of transactions in the media, computers, automobiles, consumer services, communications, machinery and other sectors is relatively high; the volatility of TMT, machinery, pharmaceuticals, automobiles, light industry, chemicals, real estate, petroleum and petrochemical sectors is above the 90% quantile.
2. After the activity and consensus level of transactional capital (two finance and northbound trading) hit a high since 2021, the northbound trading market turned to a sharp net outflow last week, and the consensus between the two began to decline.
3. The rate of purchases on the Northbound Allocation Market has slowed down, and ETFs continue to be net redeemed. $TENCENT(00700.HK$
• Recently, there has been a decrease in the amount of scrap arriving, causing steel mills to face the possibility of increasing iron production. However, steel stocks are still at a high level, so they are still under greater inventory pressure. Although there is a recovery in demand for molten iron production, this also needs to be supported by further improvements in steel production and sales. Looking at the short term, current port stocks are high, which will continue to have a depressing effect on mineral prices. Although there is an upward trend in molten iron production, the pattern of weak demand for iron ore has not fundamentally improved. $SSIF DCE Iron Ore Futures Index ETF(03047.HK$
On the supply side
• Total global shipments were 28.35 million tons, with a weekly decrease of 2.87 million tons, Australian shipments of 15.67 million tons, a weekly decrease of 3.29 million tons, Brazilian shipments of 6.41 million tons, and a weekly increase of 140,000 tons.
• Due to the impact of the hurricane in Western Australian waters, global ore shipments declined during the current period. However, with the exception of mainstream mines in Australia and Brazil, shipments from other non-mainstream mines continued to pick up and reached the next highest level during the year.
Demand side
• The operating rate of blast furnaces in 247 steel mills was 76.9%, up 0.75% from last week, down 5.83% from last year; blast furnace iron production capacity utilization rate was 82.79%, up 0.21% month on month, down 6.49% year on year; steel mill profit ratio was 22.94%, up 1.73% month on month, down 35.93% year on year; average daily iron and water production was 2,213,900 tons, up 0.57 million tons year on month, down 184,300 tons year on year.
• Domestic steel companies have begun to increase iron and water production this week, but the increase in production has not met expectations. Considering steel companies' plans to resume production, it is expected that more companies will concentrate on resuming production within the next one to two weeks. However, since the increase in iron and water production in the past five weeks has not met expectations, and the current profit balance of steel companies is still in a tight balance, there is still a risk that the increase in iron water production will not be achieved as scheduled.
In terms of inventory
• Imported iron ore stocks in 45 ports across the country were 143.66 million tons, an increase of 810,000 tons over the previous month.
This week's A-share weekly report:
1. The popularity of market transactions continues to rise, and the popularity of transactions in the media, computers, automobiles, consumer services, communications, machinery and other sectors is relatively high; the volatility of TMT, machinery, pharmaceuticals, automobiles, light industry, chemicals, real estate, petroleum and petrochemical sectors is above the 90% quantile.
2. After the activity and consensus level of transactional capital (two finance and northbound trading) hit a high since 2021, the northbound trading market turned to a sharp net outflow last week, and the consensus between the two began to decline.
3. The rate of purchases on the Northbound Allocation Market has slowed down, and ETFs continue to be net redeemed. $TENCENT(00700.HK$
Global Capital Markets Weekly Report:
The median FOMC participant continues to expect three rate cuts in 2024, which reinforces our belief that the FOMC will cut interest rates for the first time in June:
Despite an increase of 0.2 percentage points in the 2024 inflation forecast, the median at the March meeting remained stable, indicating that inflation was moderate enough to lower the threshold for interest rate cuts slightly.
The median long-term neutral interest rate and the median neutral interest rate at the end of 2026 both increased, which is consistent with our view that the FOMC will gradually increase its estimate of neutrality over time. $NVIDIA(NVDA.US$
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