Market Verdict on Iron Ore：
• Neutral to bullish.

 

Macro
• U.S. trade representative Katherine Tai said on Monday that U.S. would consider using all tools to fight inflation, including reducing tariffs on Chinese exports.
• European Commission President Ursula von der Leyen said that the EU would completely ban oil imports from Russia within six months.
• U.S. FOMC conference decided to increase interest rate by 50 basis points to 0.75- 1% area, created the biggest single time increase since May 2000. The Federal decision was within market expectation. U.S. Federal will start the balance sheet run-off by a monthly capital of 47.5 billion U.S. dollars in assets-shed from this June, raising to 95 billion per month in the next three months. Powell said the Federal would not actively consider the 75 basis points hike in the next few months.

 

Iron Ore Key Indicators:
• Platts62 $142.90, +0.55, MTD $142.90. PBF cost-efficiency started to return as the miners started to offer discount instead of premium from this April. The discount level narrowed from $1.4 to $1.1 during the late half of April when some traders started to inquire on the cargoes. However the major interest was still remained on JMBF and SP10, as both of them are with high phosphorous level, indicating mills are maintaining cost-saving strategy.
• Vallourec currently permitted by the Brazil Environment Agency to start producing iron ores. Vallourec expected to recover utilisation to 70% in the next few months. Vallourec produced 3 million iron ores annually if operated fully.
SGX Iron Ore 62% Futures& Options Open Interest (May 4th)
• Futures 70,780,600 tonnes(Decrease 106,400 tonnes)
• Options 69,619,500 tonnes(Unchanged)

 

 

Steel Key Indicators
• Iranian government reduced export duty for steel and some related raw materials, following by the negotiation with big Iranian steel maker ISPA. However the local traders believed that the quotas are not changed.

 

Coal Indicators
• China State Council approved the PBOC to increas the amount of special refinancing on the clean and efficient coal by 100 billion yuan to support the development including coal safety production, coal reserves and power generation guarantee on enterprises. After the increase of 100 billion yuan, the total amount of special refinancing to support clean and efficient utilisation of coal will reach 300 billion yuan.