China's iron ore and steel price trend differentiation under various factors

China's iron ore and steel prices have been somewhatdecoupled in recent weeks, iron ore prices are still at record highs, whilesteel prices are lower. Although the price of iron ore is relatively good, itis affected by the supply side factor, but the question remains: How to solvethe current differentiation trend? Iron orefutures prices have risen by 75% so far this year, and rebar prices haverecorded a modest increase of over 19.4%.

China has reduced iron ore imports this year. Customs datashow that iron ore imports in the first five months of this year fell 5.2%year-on-year to 424 million tons. Another sign of tighter iron ore market isthe sudden drop in inventory in China's ports. The inventory fell to 118.7million tons in the week ending June 14, the lowest since the beginning of2017, which is about 43 million tons lower than the peak reached in June lastyear.