Iron ore
– The arrival of iron ore is coming off during last week by 7% w-o-w at 23.82 million tonnes, from mysteel statistics. However this gap is expected to fill up in this week about similar amount. Port stock tendency is still increase since low evacuation plus congestion ships entered port areas.
– The daily pig iron almost reached a balanced area arround 2.45-2.47 million tonnes. However blast operation rate down to 86.46%, down 0.65% inline each week after mid-September, indicating the total iron ore demand is marginally narrowing.
– The current spike of iron ore is majorly following the steel demand, also potentially due to market squeezed during mid-November which is a delivery month. On the other side, the high coke price which also support mid and high grade iron ore, since less coke usage normally mean and increase of better iron ore grade.
– Iron ore short-run neutrual.
Macro and Money Movement:
– Market read U.S. election result as a benificial factor to global trades, as well as Phzer announced a new mRNA vaccine can prohibit 90% infection of Covid-19. The joint news apparently result in a spike of equity and commodity market for last few trading days. There are still some uncertainties sentiments arround the market since official inauguration of the new president is next January.
– From mid-run, DCE iron ore Jan contract range box move down from 808 – 874 area to 751.5 – 834.0 area during the past three months. A breakthrough on 834.0 would indicate iron ore move back to neutral to bullish range.
Steel Market:
– From physical trades data, construction steel daily trading volume reached 300,000 tonnes, which was as many as the restock day before golden weeks. Downstream demand is warming also indicated by the consecutive steel stocks decrease for past three weeks, outperformed same period last year as well as expectation in October. The continuity of the demand potentially come slower by the end of year, since some northern area will start to decrease industrial activities both because of pollution impact as well as the cold weather.
– From Mysteel research on Tangshan sample mills, steel profit has rebound from 0 area to over 250 yuan area in Q4.