Market Verdict on Iron Ore：
· Iron ore short-run rebound after oversold.
Macro
· China PM Li Keqiang presided over the executive meeting of the State Council on May 26, to support finance for small and enterprises and individual businesses. To support large enterprises to build a platform connecting supply and demand for the industrial chain of key industries, guide the upstream and downstream of the supply chain to stabilize the supply of raw materials and coordinate production and marketing, and ensure supply and price stability. To crack down on hoarding and prices control. This is the third time that State Council have paid attention to commodity and raw material prices in May.
· The Ministry of Industry and Information Technology will organize and carry out the consultant service of industrial energy conservation in 2021. Focus on key industries such as iron and steel, nonferrous metals, petrochemical, chemical industry and building materials, focus on industrial enterprises with annual comprehensive energy consumption of more than 5000 tons of standard coal equivalent, and comprehensively implement energy-saving diagnosis in combination with problems identifying in energy-saving supervision and energy audit.
Iron Ore Key Indicators:
· Iron ore May entered a bearish phase in May, thus port trades were very light and decreased more than 40% compared to April. Seaborne trades were also inactive with less buying interests.
SGX Iron Ore 62% Futures& Options Open Interest (May 26th)
· Futures 87,655,000 tonnes(Decrease 198,400 tonnes)
· Options 78,723,000 tonnes(Increase 925,000 tonnes)
Steel Key Indicators
· According to Mysteel’s calculation, Tangshan required to shut down and complete the capacity replacement, involving an average daily capacity of 27,100 tons. Among the steel enterprises involved in the shutdown of the above blast furnaces, there are 5 blast furnaces with a capacity of 4.78 million tons, which have completed capacity replacement and are planning to move out of the city. After this part of replacement is completed, the daily average capacity will drop from 13,100 tons to 10,500 tons.
· China Iron and Steel Association proposed to increase the discipline of the steel industry: Current steel market increased the fluctuation of price, which threatened the stable operation of the steel market. Iron and steel enterprises should resist vicious competition. During the period of price rise far from cost, enterprises should oppose the price speculation. During the period of price decline, enterprises should anti-dumping.
· Tangshan 10 sample steel mills pig iron before tax 3539 yuan/tonne, billet cost 4451 yuan/tonne, down 76 yuan/tonne w-o-w.
· MySteel Rebar Inventory: Rebar production 3.71 million tonnes, up 0.11% w-o-w. Mills inventory 3.31 million tonnes, up 9.09% w-o-w. Circulation inventory 7.48 milliontonnes, down 4.21% w-o-w.
