Market Verdict on Iron Ore：
• Neutral.
Macro
• Eurozone 19 countries August PMI decreased from 49.8 to 49.6, indicating the high energy cost and consumer price lower the demand. Germany and Italy PMI refreshed 26-months low.
Iron Ore Key Indicators:
• Platts62 $95.6, -5.35, AVG $95.6. PBF and NMHG regained popularity, with significantly improved volume in late half of August and discount/premium. Chinese northern ports has over 6 million tons of pellets, which hasn’t no change since June. However India mills were anxious about their pellets inventories on hand. The premium was hitting three-year-low, given the high export tax. The unexpected spike in afternoon yesterday was potentially due to a month-end arbitrage on settlement index. Some market participants indicated bottom-fishing activities. The physical trading volume from seaborne boosted yesterday, which was the most active day during past three weeks.
• MySteel 45 ports iron ore inventories at 140.36 million tons, up 2.20 million tons w-o-w. Daily evacuation 2.87 million tons, up 40,700 tons w-o-w. Australia iron ore 65.24 million tons, up 907,800 tons w-o-w. Brazil iron ore 46.7 million tons, up 355,500 tons w-o-w. 80 ships at ports, down 2.
SGX Iron Ore 62% Futures& Options Open Interest (Sep 1st)
• Futures 89,641,400 tons(Increase 3,985,100 tons)
• Options 89,641,400tons(Increase 1,007,500 tons)
Steel Key Indicators
• Mysteel researched 247 blast furnace operation rate at 80.85%, up 0.71% w-o-w. Utilisation rate 86.83%, up 1.56% w-o-w. Daily pig iron production 2.336 million tonnes, up 42,000 tonnes.
• Chinese 40 EAFs average steel production cost 4184 yuan/ton, down 73 yuan/ton. Average loss 122 yuan/ton, down 53 yuan/ton.
Coal Indicators
• Chinese 247 steel mills coke average production 472,100 tons. Coke inventories 6.14 million tons, up 241,000. Steel mills have 11.71 useable days on coke, up 0.5 days on the week. Coking coal inventories 8.10 million tons, down 39,000 tons on the week. Steel mills have 12.89 useable days on coking coal.
