Crude steel output record high, iron ore will be "crazy" down?

Recently, by the high temperature rainy seasonal influence, around the speed of work has slowed down, steel demand fell significantly in the short term. Much to the surprise of many people, China's crude steel output again hit a decade high, as one of the most important basic raw materials of iron and steel production, iron ore will go? Lange Iron and Steel Network Iron Ore Variety director Hu Fugang analysis that in the short term iron ore spot market will remain high and strong operation. Since April this year, China's apparent improvement in the epidemic, iron ore demand has increased, prices have been rising trend. Prices rose 10.36 per cent from a month earlier to $104.40 a tonne in the year to June 26, after days of high volatility. On June 8th it rose to $106.60, a new high for the year. At the beginning of June, the price of iron ore spot futures market rose sharply and hit a new high due to the news of the epidemic in the mining area. Last week, Vale announced that the mine would resume operations in early July, but prices have fallen, but remain high. Instability in output has driven prices as demand for ore has been buoyant. Although production at Australia's three biggest mines and in Brazil is increasing, it will take some time for shipments, which are expected to arrive in Hong Kong in the first half of July, according to Hu. So for now, resources remain tight. This is borne out by the low level of port inventories. Iron ore port stocks fell to 98.34 million tons as of June 24, the lowest level in three years and falling since 2018, the data showed. At present, the port inventory is still in the destocking stage, indicating that demand continues to flourish. In mid-june, key steel enterprises produced 21.423 million tons of crude steel and 20.757 million tons of steel, according to the latest data from the China Iron and Steel Industry Association. The average daily output of crude steel was 2,142,300 tons, an increase of 77,000 tons over the same period last year, an increase of 3.73 percent, setting a new high for nearly a decade. The large increase in crude steel production has directly driven the demand for iron ore. However, the large increase in crude steel production, but also to increase the inventory of great pressure. According to the latest statistics from the China Association of Steel and iron, inventories at key steel enterprises in the middle of June stood at 14.619 million tons, an increase of 797.4 million tons or 5.77 percent over the previous ten-month period, and an increase of 5.086 million tons or 53.36 percent over the beginning of the year. Just this week, the IMF  released its latest World Economic Outlook, which forecasts global GDP growth of-4.9% in 2020, downgrading global GDP growth by 5.4% in 2021 and forecasting 1% growth in China in 2020, the only country in the world's major economy to grow. In the first five months of this year, China's economic data continued to improve, which should be one of the important reasons for the new high output of crude steel. According to Hu Fugang, the current port inventory is still at a low point, the domestic crude steel production continues to hit a new high, and the port has fewer tradable resources. These factors determine that iron ore is relatively strong in the near future, short-term iron ore spot market will still be high and strong operation.