Ferrous Market
– Tangshan 10 steel mills average pig iron cost 2446 yuan/tonne, billet cost 3181 yuan/tonne, up 2 yuan/tonne. Mills gross profit 419 yuan/tonne, up 18 yuan w-o-w.
– China coal mines safety and inspection bureau planned to investigate Shanxi Province on the safety production and facilities for three months.
– MySteel Rebar Inventory: Rebar production 3.60 million tonnes, down 0.99% w-o-w. Mills inventory 2.33 million tonnes, down 5.65% w-o-w. Circulation inventory 4.88 million tonnes, down 10.57% w-o-w.
China Macro
– China State Council: China will increase commodity consumption and expand demand in rural areas. Strategy also indicated a big increase on automobile consumption, including trade in allowance.
SGX Iron Ore 62% Futures& Options Open Interest(Nov 18th)
– Futures 67,379,300 tonnes(increase 330,300 tonnes)
– Options 77,134,500 tonnes(increase 220,000 tonnes)
Verdict
– Short-term neutral