Market Overview - The mainstream spot prices for iron ore remain stable, with PB powder at 772.0 CNY/ton and lump ore at 874.0 CNY/ton [1] Futures Market - As of July 31, the main iron ore futures contract 2509 closed at 789.0 CNY/ton, down 2.38%, while the distant month 2601 contract closed at 766.0 CNY/ton, down 2.65% [2] Basis - The optimal delivery product is lump ore, with costs for lump ore, PB powder, mixed powder, and JMB powder at 793.4 CNY/ton, 818.4 CNY/ton, 823.4 CNY/ton, and 831.6 CNY/ton respectively. The basis for the 09 contract is 14.4 CNY/ton for lump ore, 39.4 CNY/ton for PB powder, 44.4 CNY/ton for mixed powder, and 52.6 CNY/ton for JMB powder [3] Demand - Daily iron output is 2.4071 million tons, down by 15,200 tons month-on-month; the blast furnace operating rate is 83.46%, unchanged; the capacity utilization rate is 90.24%, down by 0.57%; and the profit margin for steel mills is 65.37%, up by 1.73% [4] Supply - Global shipments increased by 918,000 tons week-on-week to 32.09 million tons, while the port arrival volume decreased by 130,700 tons to 22.405 million tons. The national monthly import volume is 105.948 million tons, up by 782,000 tons [5] Inventory - Port inventory saw a slight decrease, with average daily dispatch volume down month-on-month. The inventory at 45 ports is 136.579 million tons, down by 1.3248 million tons; average daily dispatch volume is 3.0271 million tons, down by 124,400 tons; and steel mills' imported ore inventory is 90.1209 million tons, up by 1.2687 million tons [6] Market Sentiment - The iron ore 09 contract experienced a volatile downward trend. Despite an increase in global shipments, the volumes from Australia and Brazil slightly declined, and port arrivals decreased. Steel mills maintain high profit margins, with iron output slightly declining but remaining around 2.4 million tons per day. The demand from the end market shows strong performance despite seasonal weakness. Inventory levels at ports are decreasing, while steel mills' inventories are rising. Looking ahead, iron output is expected to remain high in August, averaging around 2.35 million tons per day, supported by improving steel mill profits. New supply-side policies are anticipated, and there are expectations of production restrictions in Hebei ahead of the military parade [7]

Report Summary 1) Report Industry Investment Rating - The investment rating for the iron ore in the black building materials industry is "oscillation" [1] 2) Core View of the Report - The iron ore futures price is expected to show an oscillatory trend. Although the arrival volume of iron ore decreased last week, the shipping volume from Australia and Brazil increased, and the port inventory increased. The daily output of hot metal is close to the peak and is expected to remain high for some time, strongly supporting the demand for iron ore. The profitability of steel mills has improved, with off - peak electricity changing from loss to profit [1] 3) Summary by Related Catalogs Market Review - On the night session of Monday, the main 2509 contract of iron ore closed at 7110, up 0.57% [1] Important Information - The Political Bureau of the CPC Central Committee pointed out on April 25 that it is necessary to implement more proactive and effective macro - policies, make full use of more proactive fiscal policies and moderately loose monetary policies, speed up the issuance and use of local government special bonds and ultra - long - term special treasury bonds, and take timely measures such as reserve requirement ratio cuts and interest rate cuts [1] - Last week, the supply of five major steel products was 875,840 tons, a week - on - week increase of 3,130 tons or 0.4%. The total inventory was 1,534,270 tons, a week - on - week decrease of 50,410 tons or 3.2%. The weekly consumption was 926,250 tons, with the consumption of building materials down 6.9% and that of plates down 0.7% week - on - week [1] - In the first quarter, the profits of industrial enterprises above the designated size in China changed from a year - on - year decrease of 3.3% in the previous year to an increase of 0.8% [1] Market Logic - The arrival volume of iron ore decreased last week, but the shipping volume from Australia and Brazil increased, and the port inventory increased. The daily output of hot metal is close to the peak and is expected to remain high for some time, strongly supporting the demand for iron ore. The profitability of steel mills has improved, with off - peak electricity changing from loss to profit. Overall, the futures price is expected to show an oscillatory trend [1] Trading Strategy - As the holiday approaches, it is recommended to hold a light position or an empty position [1]