Market Verdict on Iron Ore：
· Iron ore short-run neutral.
Macro
· National Bureau of Statistics: H1 2021 above designated industry companies total profit 4.22 trillion yuan, up 66.9% y-o-y, up 45.5% compared to the year 2019.
· IMF global economic development review indicated the year 2021 global economy growth at 6%, in the year 2022 at 4.9%, higher than previous prediction.
Iron Ore Key Indicators:
· Platts62 $200.45, -2.50, MTD $215.28.
· Brazil miner CSN Q2 EBITDA $4.96 billion, significantly higher than $1.39 billion last Q2.
· Vale Q2 EBITDA $12 billion, the highest level as a single quarter since the year 2010. Analysts expected massive dividends would be issued this year.
SGX Iron Ore 62% Futures& Options Open Interest (Jul 27th)
· Futures 87,477,900 tonnes(Increase 1,296,400 tonnes)
· Options 84,944,400 tonnes(Increase 67,000 tonnes)
Steel Key Indicators
· Some steel mills in Jiangsu Province,China have begun to arrange production reduction plans by increasing furnace maintenance, equipment technical transformation and reducing scrap consumption. The production reduction may be concentrated in the fourth quarter of the year. It is estimated that the crude steel output of Jiangsu province needs to be reduced by 8.12 million tons in the second half of the year.
· Ganggu Construction Steel Inventory: production 5.17 million tonnes, down 363,700 tonnes w-o-w. Mills inventory 5.36 million tonnes, down 225,100 tonnes w-o-w. Circulation inventory 10.54 million tonnes, up 44,000 tonnes w-o-w.
· On July 27, Sichuan Metallurgical Group Co., Ltd. was officially established in Chengdu Shangri La Hotel. The steelmaking from the Group expected 10.49 million tons, the biggest EAF steel making group in China.
· Hebei Provincial Department of Ecological Environment: implement the differentiated measures for heavy pollution weather. All exhaust related enterprises were wrote into the emission reduction list, and formulate differentiated emission reduction measures according to different treatment levels and emission intensity. Priority shall be given to enterprises and projects involving people’s livelihood and included in the positive list. Avoid taking one measurement to all enterprises in emergency control of heavy polluted weather.
