Verdict:
• Short-run Neutral.
Macro:
• China Caixin markit PMI up to 51.8 in June, refreshed new high from June in 2021, indicating the manufacturing operation entered an expansion period.
• On Monday, iron ore, major commodities and equity market spiked supported by Chinese central bank PBOC plan to borrow government bonds from primary dealers signaled liquidity injection to other investment market.
Iron Ore Key Indicators:
• Platts62 $110.05, +3.35, MTD $110.05. The market was awaiting for news coming before China politburo in July 15th. The trading activities recovered yesterday, seeing two fixed trades on MACFs.
• Australia and Brazil delivered 30.92 million tons of iron ore last week, up 2.594 million tons compared to previous week. China 45 ports iron ore arrivals at 24.70 million tons, down 28,000 tons on the week.
SGX Iron Ore 62% Futures& Options Open Interest (Jul 1st)
• Futures 102,867,900 tons(Decrease 26,690,200 tons)
• Options 143,665,100 tons(Decrease 32,819,100 tons)
Steel Key Indicators:
• China 247 sample steel mills average pig iron production utilisation rate at 89.13%, down 0.63% on the week. Daily pig iron production at 2.3944 million tons, down 5,000 tons on the week.
Coal Indicators:
• The fire in Grosvenor mine of Anglo American raised concerns among market participants. FOB Australia spiked by $11.2 during the trading day. Higher offers heard after the trade.
