Market Verdict on Iron Ore：
• Neutral.
Macro
• The latest data released on Thursday is expected to show that US inflation is still at a decades high, but Fed officials are still hopeful that inflation will peak soon. The Federal Reserve Bank of Cleveland president Ben Meister said on Wednesday that the Fed will have to withdraw its easing policy faster than in the past and tame inflation far above its target, but it may not be necessary to raise interest rates by 50 basis points in March this year from the beginning. He said inflation could fall back above 2% later this year.
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• U.S. Energy Bureau released 13.4 million tonnes of crude oil from the strategic reserve, created the second largest crude oil trade historically.
Iron Ore Key Indicators:
• Platts 62%: $146.75, (-3.20) MTD $147.73. Major trades at Chinese ports were PBF and SSF during the first three days after the long Chinese New Year Break. However due to the China’s investigation on false price information and Winter Olympic Games, physical trades were much less compared to last two years at same period. Pellets and lumps prices expected to remain weak in particular for laycans in late March or after March since strict production curb expected to end by the timing. MB65 – P62 spread were slightly below $30, however market sources expected the spread becoming lower in the next few weeks as the latest decarbonization goal for Chinese Steel Industry appeared less aggressive than previous draft.
SGX Iron Ore 62% Futures& Options Open Interest (Feb 9th)
• Futures 84,381,700 tonnes(Increase 3,067,200 tonnes)
• Options 44,388,800 tonnes(Increase 1,896,000 tonnes)
Steel Key Indicators
• Tangshan steel mills average steel billet cost 4325 yuan/ton, up 5 yuan/ton compared to February 7th. Steel margin 345 yuan/ton up 95 yuan/ton compared to February 7th.
Coal Indicators
• China NDRC and Energy Bureau held a conference to stabilize the coal supply and investigate the overpricing companies.