Impact of Regulation on Iron Ore Prices

3047HK Iron Ore ETF joined discussion · Mar 14, 2023 20:16

Most of the friends who follow our 3047 Iron Ore ETF Public Issue know that iron ore is actually a seasonal and cyclical futures product. Usually 1, 2, 7, 8 of every year is the peak season, 5, 6, 9, 10 is the low season. Usually the price of iron ore rises in the first half of the year and the second half At the end of the year, if it is possible to seize the opportunity to invest without loss it is a good investment strategy, but in addition to this cyclical regularity, iron ore prices will be influenced by many other factors. Over 70% of the world's iron ore demand comes from China, and China has decided Most of the needs for iron ore. China's own production of iron ore (iron content) is highly dependent on imports from foreign countries, such as Australia, Brazil, etc., so if China-Australia relations are tense, such as in the past, there will be an impact on the supply of iron ore. It is common for iron ore to eventually become steel after a series of processes. The limited power output that has occurred can also lead to a decrease in the demand for iron ore, which reduces the demand for iron ore, as more work begins every year after the end of the year and the peak season for iron ore occurs. The price of iron ore increases and sometimes increases rapidly Too soon, this will also attract the attention of the relevant departments. In the past 2 and 3 years, there have been several orders issued to regulate iron ore prices. Recently, the State Commission issued a commission to organize inspection centers together with experts from within the industry to address the rapid increase in iron ore prices. Conducting meetings, analyzing iron ore market and price movements, proposing policies and recommendations. Some experts said that the relevant departments will continue to strengthen the supervision of the iron ore spot and futures market links, and severely crack down on illegal violations that spread price information, hoarding curbs, and price gouging, etc. Effectively curb unreasonable increases in iron ore prices. As for whether regulation is useful, we believe that the answer is yes, but the timeliness and regulatory power of the regulation is limited. We summarize the price changes of the 3047 Iron Ore ETF (passively tracking the Iron Ore Futures Price Index on the Dalian Commodity Exchange) for your reference in recent years after issuing a proclamation Exam.

We can see that in 12 policy times, after four policy announcements, iron ore prices rise on the contrary, but most of the time iron ore prices are still falling, but in general terms the most falls on the first day, and the extent of subsequent falls is smaller, and this is of course influenced by other factors, but it can be found Regulation The regulatory impact on iron ores usually occurs a few days after the announcement, and iron ore prices will still continue to rise after that, so in our view, iron ore prices mostly follow their own cyclicality and have a shorter duration influenced by other factors, so based on the long run Following the economic recovery in Mainland China after the opening up, infrastructure, real estate policies are on the rise, demand has increased significantly, and on a macro level, the Chinese economy is in a recovery phase. We still believe that iron ore prices have a chance to rise in the first half of this year, and this trend is expected to continue into June 5, overall. Or the shock is strong. $SSIF DCE Iron Ore Futures Index ETF(03047.HK)$ $MAANSHAN IRON(00323.HK)$ $ANGANG STEEL(00347.HK)$

Source: wind mountain pass international

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3047HK Iron Ore ETF

3047 is a team specializing in the research of commodities and smart beta. We like to exchange investment strategies.

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