Daily Virtual Steel Mill Report 24/11/21

Market Verdict on Iron Ore：
·         Neutral to bullish.
Macro
·         U.S. white house announced that the energy department will release 5,000 barrels of crude oil from Special Petroleum Reserve to resist oil price and resolve the supply disruption caused by pandemic.
Iron Ore Key Indicators:
·          Platts 62%: $99.45 (+4.75) MTD $93.38. SGX and DCE rebounded for the previous three trading days, however port price didn’t follow from yesterday as majorly depending on the mills demand. As a result, iron ore started to soften slightly this morning on futures market in response to physical market. The SGX iron ore spread expected to maintain narrow structure in the next few weeks.
SGX Iron Ore 62% Futures& Options Open Interest (Nov 23th)
·         Futures 83,384,000 tonnes(Increase 1,258,000 tonnes)
·         Options 71,792,500 tonnes(Increase 202,500 tonnes)
Steel Key Indicators
·         World Steel Association published statistics that global crude steel production in October 146  million tonnes, down 10.6% y-o-y.
·         MySteel estimated that winter production curb expected to cut steel production by 30%, with daily pig iron at 2.15 million tonnes correspondingly. However current daily pig iron production at 2.02 million tonnes, which means mills will have some room to restock and generate marginal production in the coming December.
·         Ganggu Construction Steel: Rebar production 3.71 million tonnes, down 3.81% w-o-w. Mills inventory 4.24 million tonnes, down 12.78% w-o-w. Circulation inventory 6.77 million tonnes, up 5.97% w-o-w.
Coal Indicators
·         China Shandong mills lowered purchase price on coke by 200 yuan/tonne this morning as the seventh round of correction.