Ferrous Market
– Tangshan 10 sample steel mills pig iron before tax 2702 yuan/tonne, billet cost 3474 yuan/tonne, up 110 yuan/tonne w-o-w. Gross profit 396 yuan/tonne, up 100 yuan/tonne.
– China will reduce some waste metal custom tax to 0. Mongolia coke custom tax reduced from 5% to 2.5%.
– MySteel Rebar Inventory: Rebar production 3.67 million tonnes, down 0.63% w-o-w. Mills inventory 2.24 million tonnes, down 6.41% w-o-w. Circulation inventory 3.62 million tonnes, down 2.71% w-o-w.
– From January to November, China flat steel export 29.7 million tonnes, down 17% y-o-y. Long steel export 6.27 million tonnes, down 30.6% y-o-y. Wire rods export 1.83 million tonnes, down 2.2% y-o-y.
Macro Market
– China Ministry of Transport data indicated road and water transportation fixed investment up 10.9% from January to November.
– U.S. November PCE 1.4%, lower than estimation at 1.5%. However durable good orders 0.9%, est. 0.6%, indicating inflation potentially recover early next year.
SGX Iron Ore 62% Futures& Options Open Interest(Dec 23rd)
– Futures 81,416,900 tonnes(increase 1,059,400 tonnes)
– Options 67,113,000 tonnes(increase 234,000 tonnes)
Verdict
– Short-term neutral to bearish