Supervision repeated position iron ore futures should be overvalued by the limit?


Source: Finance Union
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Financial Union (Beijing, reporter Zhang Chong), Tuesday iron ore futures main contract limit.Authorities said they are highly concerned about changes in iron ore prices and will take further effective measures to effectively maintain the normal order of the market.Iron ore prices fell significantly after regulators cracked down on speculation.In view of the recent abnormal fluctuations of iron ore prices, the Price Supervision and Competition Bureau of the State Administration for Market Regulation, the Price Department of the National Development and Reform Commission, and the Futures Department of the China Securities Regulatory Commission jointly held a meeting recently to understand in detail the changes in the port inventory of iron ore trading enterprises and their participation in iron ore spot trading.The relevant authorities warned the relevant enterprises not to fabricate and release false price information, not to maliciously hype, hoard for profit, bid up prices, and called on the relevant State-Owned enterprises to take the initiative to shoulder social responsibilities and help the government to ensure supply and price stability.Market participants said that the current round of iron ore prices continued to rise in the process, downstream demand has not significantly improved.From last December to now, the average daily output of hot iron is substantially lower than the same period in previous years.After the iron ore price reached $150 / ton, there was clearly a very large deviation from the fundamentals of supply and demand.In addition, the current port iron ore inventory is still high, as of February 11, 45 port imported iron ore inventory increased by 1.6364 million tons to 150 million tons.Due to the impact of the Spring Festival holiday, steel mills reduce replenishment, port inventory accumulation, port inventory is expected to decline at the rate of 10 million tons per month, until falling to the level of about 120 million tons.From the perspective of supply and demand, there is no obvious gap between supply and demand in the current iron ore market.From the perspective of valuation, the current iron ore price is still much higher than the mainstream mine cost, there is a suspicion of overvaluation.Citic Futures black building materials group pointed out that the current northern steel production constraints, iron ore actual demand was significantly suppressed, port inventory continued to accumulate.With the implementation of the “dual carbon” policy, the supply of overseas mines will increase, and the end demand will fall, the pressure on iron ore prices will also increase.Citic Jiantou Futures industrial products team told Financial Union, iron ore supply is acceptable, high inventory, demand is significantly lower than in previous years, the current stage of the fundamental deviation between supply and demand.Recent iron ore prices are facing a very big downward pressure.Regulatory authorities to introduce measures to curb speculation in ore prices recently, the relevant departments in a row, will crack down on iron ore market operations.According to market sources, the follow-up regulatory authorities may introduce measures to curb speculation in iron ore prices, including policies to reduce reciprocal trading between iron ore traders.In addition, the Price Department of the National Development and Reform Commission and the Price Supervision and Competition Bureau of the State Administration for Market Regulation plan to send a joint research team to some commodity exchanges and key ports to carry out supervision and research on the iron ore market.In the next step, relevant authorities will closely monitor market price changes and crack down on illegal activities such as fabricating and spreading information about price rises, hoarding and pushing up prices.

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