Ferrous Market
– MySteel Rebar Inventory: Rebar production 3.09 million tonnes, down 4.06% w-o-w. Mills inventory 5.12 million tonnes, up 51.5% w-o-w. Circulation inventory 10.09 milliontonnes, up 37.9% w-o-w.
– Tangshan started harsh environment control started from February 16th, without mentioning the end date.
– MySteel researched 7 ports from Australia and Brazil iron ore inventories at 13.52 million tonnes, up 341,000 tonnes w-o-w. This inventory number was similar to the same period of last year.
– Some northern China areas started to stop offering some steel types because of expecting downstream recovery as well as cross Chinese New Year rebound on metal market.
– ArcelorMittal Q4 iron ore production 15.3 million tonnes, up 3.4% y-o-y. Year 2020 production 58 million tonnes, up 1.6% y-o-y. Iron ore year 2020 delivery 10.6 million tonnes, up 8.1% y-o-y. Crude steel 2020 production 71.5 million tonnes, down 2.4% y-o-y. Crude steel 2020 delivery 69.1 million tonnes, down 18.2% w-o-w.
Macro
– China commodity and equity market both increased to catch up the cross Chinese New Year rebound on global non-ferrous, petro-chemicals and equity market.
– FOMC maintained the ease monetary strategy in the near future.
SGX Iron Ore 62% Futures& Options Open Interest(Feb 17th)
– Futures 79,270,100 tonnes(increase 3,725,700 tonnes)
– Options 50,784,700 tonnes(increase 3,826,200 tonnes)
Verdict
– Short-term neutral.
