Verdict:
• Short-run Neutral.
Macro:
• US October inflation up 3.2% on the year, created the lowest over the last seven months, lower than estimated 3.3%, last 3.7%. Core CPI 4%, created the lowest since September 2021. Traders were bet the inflation cycle should be over, US equities S&P500 grew 1.91% while debt yield tanked.
Iron Ore Key Indicators:
• Platts62 $130.20, +0.40, MTD $127.53. Iron ore saw a significant growth yesterday, supported by the traders expectation on no interest hike this year and potentially cut in next year. Thus, bond yield tumbled with return of risk preference, which supported huge growth in global equities and commodities.
SGX Iron Ore 62% Futures& Options Open Interest (Nov 14th)
• Futures 131,950,200 tons(Increase 1,087,500 tons)
• Options 105,797,300 tons(Increase 715,000 tons)
Steel Key Indicators:
• US HRC prices were flat this week after few rounds of rebound at $900/st ex-work, as mills failed to secure higher prices. During last week, EAF steelmaker Nucor and integrated steelmaker US Steel both increased their minimum HRC prices to $950/st, followed their competitor Cleveland Cliffs price rise to $1000/st.
Coal Indicators:
• There were many north-western cokery plants proposed 100-110 yuan/ton increase on physical coke in North-western China, considering the winter stock from steel mills. Market believed the negotiation could be reached as the low inventories in mills.
• Asia met coal FOB rebounded yesterday with return of Chinese buyers driven by a winter stock demand, while domestic supply became tight in November.
