Market Verdict on Iron Ore：
• Neutral.

 

Macro
• U.S. central PCE increased 4.6% year-on-year, est. 4.7%, last 4.8%, refreshed the lowest since February 2021.
• Jan- July above designated industrial value added amount at 4.89 trillion yuan, down 1.1% on the year.

 

Iron Ore Key Indicators:
• Platts62 $105.80, +3.55, MTD $105.49. 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. NMHG regained popularity. Several trades on NMHG were reported at $101. Chinese northern ports has over 6 million tons of pellets, which hasn’t no change since June. Thus there is no import demand either from June.
SGX Iron Ore 62% Futures& Options Open Interest (Aug 25th)
• Futures 100,865,000 tons(Increase 840,900 tons)
• Options 99,964,500 tons(Increase 1,097,50 tons)

 

 

Steel Key Indicators
• H1 Chinese crude steel production 527 million tons, down 6.5% on the year. Pig iron 439 million tons, down 4.7% on the year. CISA member steel mills recognised revenue 334 million yuan, down 4.7% on the year. Member profit 10.34 million yuan, down 55.5% on the year.
• Tangshan average billet cost 3772 yuan/ton, up 64 yuan/ton. Steel margin negative 22 yuan/ton, down 104 yuan/ton.
• EAFs average billet cost 4257 yuan/ton, down 21 yuan/ton. Average production loss 69 yuan, down 28 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.