Market Verdict on Iron Ore：
• Neutral.
Macro
• Li Keqiang presided State Council meeting and implemented 33 measures in six areas, mainly including: annual tax rebate and reduction of 2.64 trillion yuan, doubling the amount and proportion of loan tools to small capitals, removing unreasonable restrictions and fees in the supply chain, promoting consumption and effective investment, ensuring energy security and increase new safe capacities, and guarantee the social security of unemployment.
• Reuters indicated that Tesla factory in Shanghai would recover the production to pre-pandemic level in a few days.
• President of European central bank Christine Lagarde indicated that the ECB potentially move interest rate out of negative area. The market expect a 110 basis points of interest rate increase in 2022 -25 bp increase at each policy meeting from July.
Iron Ore Key Indicators:
• Platts62 $135.95, -0.30, MTD $133.38. Seaborne PBF obtained growing interests, in particular after price correction. However buyers are still preferring MACF. China MACF at port areas decreased fast. South Flank mines expected to ship more MACF to China. 65-62 spread remained narrow around $23 because of the thin steel margin. Some traders indicated that mills resold Carajas fine considering the cost. SSF discount narrowed for consecutive months while SSF/PBF ratio also narrowed, indicating the low grade fines are favorable options for end-users to optimise cost-efficiency.
SGX Iron Ore 62% Futures& Options Open Interest (May 23rd)
• Futures 79,803,100 tons(Increase1,336,800tons)
• Options 76,103,000 tons(Increase 295,000 tons)
Steel Key Indicators
• China imported scrap iron and steels 25,400 tons in April majorly from Japan, up 12.06% m-o-m, up 66.64% y-o-y.
Coal Indicators
• The decrease on coal tariff in India support coking coal price in Pacific area. However China domestic physical coking coal still saw clear resistance due to the thin steel margin.
