Market Verdict on Iron Ore：
• Neutral to bearish.
Macro:
• Europe council predicted that Eurozone GDP average growth rate at 0.3%, lower than last expectation at 2.3% in early 2022.
• U.S. FOMC participants indicated a slow down on interest hike, yet to see any sign of interest decrease in 2023.
Iron Ore Key Indicators:
• Platts62 $117.00, -0.65, MTD $117.33. PBF float premium was assessed at $1.65 based on February index, which was similar to last two weeks. The float premium was strong compared to fixed price. The winter iron ore stock for Chinese mills entered a end with Chinese New Year looming, with most of stocks were purchased in portside, with flexible size and time. Steel mills suffered negative production margin because the uptick of raw materials and low steel sales. The market expected a correction on iron ore with lower marginal demand.
SGX Iron Ore 62% Futures& Options Open Interest (Jan 4th)
l Futures 90,658,300 tons(Increase 861,900 tons)
• Options 66,151,300 tons(Increase 1,150,500 tons)
Steel Key Indicators:
• Tangshan average pig iron cost 3046 yuan/ton, average billet cost 3925 yuan/ton, up 7 yuan/ton. Average steel production loss at 195 yuan/ton.
Coal Indicators:
• Chinese physical coke price down 100-110 yuan/ton for the first round after several decrease in December.