Ferrous Market Updates
– Major mid-grade iron ores are seeing few weeks of tight supply. However some physical traders expect the supply will recover due to June shipments increase may reflect on July arrivals. Many ships congested in ports.
– Tangshan production curb only restricted on sintered machines, however no impact on blast furnace.
– Ganggu Construction Steel Inventory: production 5.75 million tonnes, down 76.300 tonnes w-o-w. Mills inventory 5.41 million tonnes, up 4,600 tonnes w-o-w. Circulation inventory 10.92 million tonnes, up 119,600 tonnes w-o-w.
China Macro
– China Bank of Communication indicated the H2 2020 has limited room on board interest rate cut. However expected 1-2 rounds of targeted interest cut.
– China Housing and Urban-Rural Development Ministry researched top housing developers. Analysts expect this research might be connected to the next round of housing restriction.
SGX Iron Ore 62% Futures& Options Open Interest(Jul 7th)
– Futures 63,624,600 tonnes(increase 808,900 tonnes)
– Options 93,670,600 tonnes(increase 1,190,000 tonnes)
Verdict
– Short-term be aware of high level taking gains.