Ferrous Market
– Ganggu Construction Steel Inventory: production 5.32 million tonnes, up 17,800 tonnes w-o-w. Mills inventory 3.82 million tonnes, down 301,500 tonnes w-o-w. Circulation inventory 8.66 million tonnes, down 704,400 tonnes w-o-w.
– Eurofer estimated steel apparent consumption down 14.6% in the year 2o2o, previous expected down 16.6%. Expected apparent consumption up 13% in the year 2021.
– Physical traders from Korea and Japan started to by Yandi based on Platts 62% Index and premium because the demand recovered. However low grade iron ore on ports are becoming less cost efficient.
Macro
– China first three quarters macro leverage ratio increased by 27.7% to 270.1%. However Q3 leverage ratio increase 3.7%(Q1 up 13.9%, Q2 up 7.1%) .
SGX Iron Ore 62% Futures& Options Open Interest(Nov 4th)
– Futures 60,098,200 tonnes(increase 270,800 tonnes)
– Options 73,433,300 tonnes(increase 370,000 tonnes)
Verdict
– Short-term neutral.