Market Verdict on Iron Ore：
· Iron ore short-run neutral to bullish.
Macro
· The State Council held a national conference to deepen the reform of “decentralization, management and improving service” and to stimulate the vitality of market players. Li Keqiang, the China PM, proposed to further empower market players, reduce improper intervention, and oppose monopoly and unfair competition.
Iron Ore Key Indicators:
· Platts 62% 209.45 (+0.35), MTD 209.28. Market returned calm after a huge correction as well as a quick recover. However Shandong port PBF remained strong during this week, port price up 20 yuan/tonne. Seaborne PBF premium maintained historical high at $9.3/tonne. The high premium was also in line with historical high index prices as well.
· Iron ore forward physical trades at 2.03 million tonnes per day as an average of this week, up near 3 times compared to previous week.
SGX Iron Ore 62% Futures& Options Open Interest (Jun 2nd)
· Futures 75,289,200 tonnes(Increase 316,700 tonnes)
· Options 69,202,300 tonnes(Increase 977,500 tonnes)
Steel Key Indicators
· Tangshan 10 sample steel mills pig iron before tax 3534 yuan/tonne, billet cost 4446 yuan/tonne, down 5 yuan/tonne w-o-w. Gross profit 524 yuan/tonne, up 35 yuan/tonne.
· MySteel Rebar Inventory: Rebar production 3.72 million tonnes, up 0.34% w-o-w. Mills inventory 3.08 million tonnes, down 6.69% w-o-w. Circulation inventory 7.34 million tonnes, down 1.83% w-o-w.
· The European Commission will propose a carbon border adjustment mechanism applying to imports of electrical energy to the EU, according to draft of the proposal seen by Bloomberg, the applied products include iron and non-alloy steel in ingots or other primary forms, semi-finished products of iron or non-alloy steel. 