Market Verdict on Iron Ore：
• Neutral to bullish.
Macro
• As expected, the Federal Open Market Committee (FOMC) of the Federal Reserve raised the federal benchmark interest rate range by 25 basis points to 0.25% – 0.50%, the first interest rate increase since December 2018. Fed officials expect interest rates to reach 1.9% by the end of 2022. If the Fed raises interest rates by 25 basis points each time, it will raise interest rates each time at the remaining six meetings this year.
• The European Council reached an agreement on the relevant rules of the carbon border adjustment mechanism (CBAM) on the 15th. The EU will levy taxes on cement, aluminum, chemical fertilizer, steel and other products imported from countries and regions with relatively loose carbon emission restrictions. From 2026, the EU will officially and comprehensively levy carbon tariffs.
• The Chinese Financial Stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market issues, mentioned that the relevant departments should respond to the hot issues concerned by the market in a timely manner. All policies that have a significant impact on the capital market should be coordinated with the financial management department in advance to maintain the stability and consistency of policy expectations. After the meeting, China onshore equities as well as Chinese linked equities global wise rebounded sharply, steel and industrial materials commodities also rose sharply.
Iron Ore Key Indicators:
• Platts62 $145.45, +9.90, MTD $151.18. The spread between onshore ports and seaborne maintain wide, seaborne corrected as the thin buying interests last week. The major seaborne trades were concentrated in the heavy discount iron ores, for example MACF, JMBF or Yandi Fines. As Chinese steel margin narrows, SP10 fines and SSF are also becoming popular on ports. Ukraine miners were running at only 50% utilization rate.
Steel Key Indicators
• Mysteel researched 316 downstream projects in Shanghai. 78 out 316 projects are stopped from 2-14 days. 44% of the normal operated projects need to provide negative nucleic acid test results in every 48 hours.
• China Shandong province are impacted significantly by the Omicrown spread, 93% of the scrap recycling enterprises which are operating indicated that the scrap arrivals have decreased significantly.
Coal Indicators
• Australia premium low coking coal FOB price keep refreshing historical highs, because the big spike on the steel price in European market which support the demand of coking coals. However CFR China was decreasing because the new round of pandemic expected to hurt the demand market in current few weeks. 