Market Verdict on Iron Ore：
• Neutral.

 

Macro
• The US Senate on Thursday approved Powell’s second four-year term as the chairman of Federal Reserve. Powell reiterated his expectation that the Fed would raise interest rates by 50 basis points in the next two FOMC meetings, and promised to take more actions if the inflation data turned into unexpected condition.
• International Energy Agency (IEA) director Birol said during his visit to Warsaw that if necessary, the IEA may release more oil in the future. The agency said on another occasion on Thursday that there would be no oil shortage globally even if the sanctions led to a decline in Russian production.

 

Iron Ore Key Indicators:
• Platts62 $127.55, -5.95, MTD $135.46. Seaborne iron ores such as PBF saw several interests based on sales with discount. However weak steel margins also limited the size of deals. Physical traders indicated that market was interested in FMG SSF as well as some low grade Indian fines. Buyers would be interested on discounted PBF however not accepting moderate premium.
• MySteel 45 ports iron ore inventories at 139.96 million tons, down 3.29 million tons w-o-w. Daily evacuation 3.21 million tons, up 56,500 tons w-o-w. Australia iron ore 64.98 million tons, down 2.496 million tons w-o-w. Brazil iron ore 46.65 million tons, down 97,000 tons w-o-w. 91 ships at ports, up 2.

SGX Iron Ore 62% Futures& Options Open Interest (May 12th)
• Futures 75,482,400 tons(Increase39,600 tons)
• Options 73,128,000 tons(Increase 901,000 tons)

 

Steel Key Indicators

• Mysteel researched 247 blast furnace operation rate at 82.61%, up 0.7% w-o-w. Utilisation rate 88.28%, up 0.53% w-o-w. Daily pig iron production 2.38 million tonnes, up 14,400 tonnes.
• Tangshan average billet cost 4721 yuan/ton, down 105 yuan/ton. Steel margin – 81 yuan/ton, down 45 yuan/ton.

 

Coal Indicators
• China National Development and Reform Commission: signing medium and long-term coal contracts is important to stabilize the coal supply and demand and promote the consistent development of upstream and downstream. The government encourages and supports long-term sales contract equal to or longer than 1 year.