Market Verdict on Iron Ore：
• Neutral.
Macro
• U.S. Markit Manufacturing PMI 51.3 in August, refreshed new low since July 2020. Eurozone Manufacturing PMI 49.7, refreshed new low of the past 26 months.
• MySteel 170 power plants total coal inventories 26.17 million tons, down 267,000 tons w-o-w. Daily consumption 1.575 million tons, up 28,000 tons w-o-w. Inventory turnover at 17 days.
Iron Ore Key Indicators:
• Platts62 $102.50, +0.20, MTD $105.66 Both seaborne and portside market saw a cooling down on buying interest during the week. PBF inventories at Shandong reached 5 million tons, which were 5 times bigger than normal inventories level in previous few years. Thus, PBF sellers expected to complete the deal before landing on ports. The trades potentially shift from sellers’ option to buyers side. On the discount market, MACF regained buying interest and traded in both fixed and float price. The fixed price traded in range $94-98, and float trade has a $10.3-10.8 discount based on September Index.
SGX Iron Ore 62% Futures& Options Open Interest (Aug 24th)
• Futures 100,024,100 tons(Increase 648,300 tons)
• Options 98,867,000 tons(Increase 765,000 tons)
Steel Key Indicators
• Tangshan average billet cost 3772 yuan/ton, up 64 yuan/ton. Steel margin negative 22 yuan/ton, down 104 yuan/ton.
Coal Indicators
• Australia met coal saw mixed outlook during the week, since buyers were waiting for new direction. FOB Australia and CFR China PLV index remain flat during the week. There were PLV and PMV offers from Peak Down and Goonyella, closed on 4 p.m. today. India end-users indicated the high coking coal price would stressed their steel margins. China seaborne demand yet to confirm.
• Chinese third rounds of physical coke increase in process of negotiation. However some market sources indicated a potential to decrease if rejected by steel mills.
