Iron Ore and Steel Market Updates
– Steelbank: construction steel inventories 6.95 million tonnes, down 1.87% w-o-w. HRC inventories 1.99 million tonnes, down 4.71% w-o-w.
– China Statistic Bureau: crude steel output in May rose 4.2% y-o-y. Jan-May steel output rose 1.9% y-o-y. Pig iron output in May rose 2.4% y-o-y. Jan-May pig iron rose 1.5% y-o-y.
– Many China provinces cement price corrected since beginning of June, indicating the construction activities are slowing.
China Macro and Weather
– China central bank PBOC added 200 billion yuan through the medium-term lending facility at a rate of 2.95%, unchanged from last time, disappointed many analysts expecting interest cut last week.
– Typhoon Nuri became the first typhoon to make landfall in China this year and hit the coast of southern province Guangdong and Guangxi. Part of Guangdong and Guangxi are at risk of mountain torrents and landslides. Some industry activities are decreased due to the disastrous weather.
– China PPI may up 4.4% in may, last 3.9%, forecast 5%.
SGX Iron Ore 62% Futures& Options Open Interest(Jun 12th)
– Futures 69,914,000 tonnes(increase 670,000 tonnes)
– Options 111,305,600 tonnes(increase 2,625,000 tonnes)
Verdict
– Short-term neutral.