[Ferro-Alloys.com]

  On the supply side, the recent Australian shipment has ended due to the phased impact of weather, and there is no short-term maintenance plan for Australian and Brazilian ports, and there is a possibility of impulse in the future, and the shipment volume has obviously picked up. According to the calculation of transportation time, it is expected that the arrival volume in January will increase significantly, and the early arrival volume will drop by about 4 million tons, which may be difficult to reappear in the short term. According to the arrival volume and the trend of hot metal production, port inventory is expected to accumulate in January under the background of three consecutive weeks of increase.

  On the demand side, the impact of seasonal off-season should not be underestimated. The speed up of infrastructure construction and real estate is affected by the temperature drop, resulting in insufficient follow-up of steel downstream demand. From the perspective of hot metal demand, due to the approach of the Spring Festival, the superimposed profit fell, and the proportion of equipment maintenance in each region increased slightly. At present, the profit of ribbed steel blast furnace in North China has been in deficit, while that in East China and South China has also dropped to less than 100 yuan. It is expected that the steel supply represented by ribbed steel will continue to decline slowly in a narrow range. The inflection point of steel inventory has appeared. The data shows that the recent inventory of five major varieties is 13.6798 million tons, with a month-on-month increase of 605 million tons and a year-on-year increase of 8717 million tons. In terms of time, there are still five weeks to accumulate storage time before the Spring Festival. If the decline of steel demand exceeds expectations, the inventory pressure is too large, or the whole black chain market will be affected. This year's Spring Festival is relatively late, and steel mills don't have to rush to replenish their iron ore reserves. Except for a slight increase in the second week of December 2020, the iron ore inventories of sample steel mills are going to the warehouses in a small range for the rest four weeks, basically maintaining about 115 million tons. Overall, iron ore demand may fall with the seasonal impact.

  To sum up, at present, iron ore has not appeared the signal of continuous sharp decline. In the repeated market, it is mainly to control the risk. From the perspective of risk return ratio, we can consider buying put options.

• [Editor:Catherine Ren]