Ferrous Market
– MySteel 45 ports iron ore inventories at 127.89 million tonnes, up 1.44 million tonnes w-o-w. Daily evacuation 2.72 million tonnes, up 234,500 tonnes w-o-w. Australia iron ore 61.52 million tonnes, up 1.33 million tonnes w-o-w. Brazil iron ore 43.69 million tonnes, down 311,000 tonnes w-o-w. 126 ships at ports, up 4.
– Atlas Iron sent a proposal on McPhee Creek iron ore project to Australia Environment Protection Agency. McPhee Creek has 250 million tonnes of iron ore reserves.
– Tangshan 40 out of 126 Blast Furnace on maintenance, total impact 657,800 tonnes of pig iron production weekly. Tangshan furnace utilisation rate at 75.39%, down 0.74% w-o-w.
– Shanghai rebar physical has a discount over futures contract. Physical rebar started to correct from this Tuesday, indicated futures potentially overvalued. Shandong PBF traded on 1175 -1180 yuan for most of time during the current two weeks, which would potentially pull back SGX and DCE pricing as well. Iron ore trades on port was very light compared to same period of previous years.
Macro
– U.S. currency Index DXY rebounded 2.25% from the low in February 89.68, also created new high from December 1st, 2020. Metals corrected massively during the week including copper and nickel. Ferrous were following the cooling of speculation on inflation benefited commodities.
– China GDP in 2021 target at 6%.
SGX Iron Ore 62% Futures& Options Open Interest(Mar 4th)
– Futures 70,464,600 tonnes(Increase 1,995,200 tonnes)
– Options 50,645,400 tonnes(Increase 1,377,500 tonnes)
Verdict
– Short-term neutral.
