Iron ore main contract fell by nearly 5%

 　After the opening on March 20, the main contract of iron ore fell by nearly 5%, and the disk was always dominated by oscillations, with the largest drop of 5.65%, ending at 5.10%. Market analysts said that the reason was mainly related to the official release of the Danshui Valley on March 19, Brazil, saying that Minas Gerais was partially affected by the mine disaster and the mining area was about to resume production.


　　According to Chen Junjie, an analyst at Yongan Futures, the operation of the Brucutu mine and the Laramjeiras mine dam has been widely expected in the market to be re-produced for 3-6 months, or even postponed. Now, in one and a half months, the news of the resumption of production has been reported, which clearly exceeds market expectations and constitutes a black swan event. It was originally estimated that the production of freshwater valleys after the mine disaster will be reduced by 57 million tons compared with 2018. If the capacity of 30 million tons is resumed, the supply reduction will be 27 million tons. Globally, the global supply of iron ore after the mine disaster was originally expected to decrease by 42.7 million tons from 2018, and the gap is now reduced to 12.7 million tons. Reminiscent of the closure of the Timbopeba mine last week, the situation is basically the same as Brucutu, so the possibility of future production is greatly enhanced.
　　In fact, in the view of China Eastern Airlines futures analyst Yang Wenhu, the current rise in iron ore prices is still based on the collapse of the Minas Gerais tailings dam that occurred in Brazil's Vale in January. The reduction in the annual supply of iron ore from the Brucutu mine is not among the planned reductions, so iron ore prices remain strong at high levels. The mine suddenly announced that it would resume operation and remove obstacles, which directly led to the diving market price of iron ore in early trading today.
　　Zheng Jingyang, a metal analyst at the Nanhua Futures Research Institute, said that the impact of the suspension of production on supply once exceeded market expectations, and the price of the mine was stimulated to rise rapidly. Steel mills and traders had higher enthusiasm for speculative replenishment, but when the price of the mine hit $90 The willingness to purchase at the demand side is inhibited by high mine prices, and the power of rising mineral prices is weakened. Nowadays, with the production capacity of 30 million tons in the Brucutu mining area, the S11D project will continue to increase production stably in the first two months. The Brazilian mine shipment has not been significantly affected after the year of shipment. The port Brazil resources are also abundant, and the market is facing the risk of later ore supply. Expected to be significantly repaired, the price of the mine is also down. In particular, the long-term supply risk mitigation caused the 09 contract to close the daily limit, which was greater than the near-month contract.
　　Zheng Jingyang believes that the supply-side event-type emotional speculation can only aggravate the short-term fluctuation of ore. From the current developments, the supply of Brazilian mines has not been greatly affected, and the latter market is still driven by the demand side. At present, with the weakening of the northern production limit, the demand for sinter is restored in stages. However, due to the high inventory of steel ore in the steel mill, the recovery of demand is slow, and the ore stage is under pressure, and the demand in recent months is still Support, short-term downside space is limited, still dominated by high-level oscillations. For the Yuanyue 09 contract, due to the increased pressure on steel mills and the low premium of high-quality mines, the demand rhythm of steel mills is more cautious. Therefore, we believe that the price of minerals will gradually be under pressure in the long run.