Daily Ferrous Physical Review Dec 31st

Ferrous Market
–    MySteel Rebar Inventory: Rebar production 3.5 million tonnes, up 1.02% w-o-w. Mills inventory 2.58 million tonnes, up 15.27% w-o-w. Circulation inventory 3.64 million tonnes, up 0.43% w-o-w.
–    Tangshan 10 sample steel mills pig iron before tax 2796 yuan/tonne, billet cost 3581 yuan/tonne, up 107 yuan/tonne w-o-w. Gross profit 159 yuan/tonne, down 237 yuan/tonne.
–    MySteel estimated steel capacity up 40 million tonnes in the year 2021.
–    China scrap resource in the year 2020 reached 260 million tonnes, up 20 million tonnes w-o-w. Steel mills produced 47.66 million scraps.

Macro
–    China December PMI 51.9, last 52.1, estimate 52.
–    China steel PMI 45.8, last 49.3.

SGX Iron Ore 62% Futures& Options Open Interest(Dec 30th)
–    Futures 82,603,600 tonnes(decrease 173,500 tonnes)
–    Options 67,563,000 tonnes(0 tonnes)

Verdict
–    Short-term neutral to bearish

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