Verdict:
• Short-run Bearish.
Macro:
• Rio Tinto started the world’s biggest mining project, Simandou Project, estimated to see the first delivery in 2025. The project estimated to produce 60 million tons of iron ore, accounted for 5% of total seaborne market.
• World Bank published global economic outlook, estimated global GDP up 2.4%, lower than 2.6% estimated last year. The bank decreased the growth rate from 3% to 2.7% in 2025.
Iron Ore Key Indicators:
• Platts62 $139.10, -0.30, MTD $141.53. The demand for February laycans was resilient, considering restock after Chinese New Year. However, the prompt demand was weak given a decreasing pig iron production. MB65- P62 potentially expand with the increasing demand on high grade versus mid grade. There was BRBF traded at $139.2/mt, and a MACF traded at $134.3/mt.
SGX Iron Ore 62% Futures& Options Open Interest (Jan 9th)
• Futures 112,447,400 tons(Increase 1,517,000 tons)
• Options 89,069,500 tons(Increase 3,572,100 tons)
Steel Key Indicators:
• MySteel estimated that the total rebar purchase in December reached 7.48 million tons, up 1.5% on the month. MySteel estimated 5.97 million purchase in January.
Coal Indicators:
• The high coke inventories in Chinese mills potentially mean longer price cut on physical coke price in China in January and February.