Verdict:
• Short-run Neutral.
Macro:
• Global equity market saw a “Black Monday” because of unwind on carry trades, which led to equity and some commodity drop. Nikkei index once dropped by 13%, created the biggest single day correction from 1987. However, traders bet on US emergent interest cut or market stimulus, which help global assets rebound in early Tuesday.
• The US ISM non-manufacturing index for July was 51.4, better than expected at 51, breaking away from the worst contraction in four years set in June, with a previous value of 48.8. Employment, new orders, and commercial activities have returned to the expansion area.
Iron Ore Key Indicators:
• Platts62 $104.10, +0.55, MTD $103.32. There was MACF trade on $98.2, which was slight increase by $0.65 from past week. JMBF trade was roughly on the same discount level. Discount concentrates increase was more humble compared with index. Thus, the index level was actually high.
SGX Iron Ore 62% Futures& Options Open Interest (Aug 5th)
• Futures 111,010,300 tons(Increase 1,014,800 tons)
• Options 138,671,500 tons(Increase 553,700 tons)
Steel Key Indicators:
• Vietnam steel mill Hoa Phat cut price by $30 for SS400 and SAE 1006 HRC to $530/mt delivered on September and October.
Coal Indicators:
• The FOB Australia coking coal price down $1 based on a Peak Downs PLV trade between miner and European steelmaker. As expected, the current offers attract many real buyers, which should support index from bid decrease in next few weeks.
