Australian iron ore exports reached a record high of a $10.9 billion in October, accounting for 36% of Australias total exports in October, according to data released by the Australian Bureau of Statistics (ABS) on November 24. In October, Australias iron ore exports increased by US $833 million, or 7%, from a year earlier. In the same month, Australias total export value increased by 6% year-on-year to US $30.5 billion.
Analysts pointed out that iron ore prices rose to more than $130 per ton this week, a two month high, and continued to be optimistic about the performance of Australian iron ore producers in November.
It should be noted that the current spot price of iron ore is at a high level since January 2014. In view of the current global epidemic situation is still relatively serious, there may be some uncertainty in economic recovery. In order to cope with this possible uncertainty, the current relatively high price of iron ore also provides a certain margin of safety for enterprises to hedge and avoid risks.
For the future market, relevant analysts of pioneer futures believe that the main factor determining iron ore futures price is the improvement of downstream demand side. With the gradual entering of deep winter, the production restriction in heating season may become stricter, the blast furnace operating rate and daily average molten iron will enter a seasonal decline, and the downstream demand presents a near worry free and far worried pattern, and the iron ore futures price in the fourth quarter may maintain a weak oscillation pattern.
Relevant experts pointed out that at present, there are corresponding futures varieties from finished steel products to raw materials, which provides a good environment for iron and steel enterprises to hedge. This is the general trend and directly affects the competitiveness of iron and steel enterprises. The iron ore futures price is more and more representative of the spot market supply and demand, and has become an important reference for spot trade pricing. It has effectively helped many enterprises lock in the cost of raw materials and production profits, and complete the price risk hedging.
Relevant market participants said that in order to avoid the risk of large fluctuations in raw material prices, hedging in the futures market is undoubtedly important and necessary. If the iron and steel enterprises do not participate in futures, it will not only give up the opportunity to hedge risks. From a higher level, if the enterprises do not participate in the futures market, they will not be able to better send out and reflect the voice of iron and steel enterprises through the futures market, allowing the market to rise and fall and only passively accept it. Therefore, steel mills should learn more about and study futures. Considering that the current iron ore futures price has reached 900 yuan / ton, and the price is likely to fall back in the case of uncertain supply and demand, the hedging strategy of industrial enterprises should be timely followed up and adjusted, seize the opportunity, and better protect the production and operation with the help of futures tools. Source: futures daily editor: Yang Bin_ NF4368