Verdict:
• Short-run Neutral.
Macro:
• The US Federal Reserve ended its two-day monetary policy meeting on July 31st and announced that the target range for the federal funds rate would remain unchanged between 5.25% and 5.5%. Federal Reserve Chairman Powell stated after the meeting that there is a possibility to discuss lowering policy rates at the September meeting if inflation related data fall into expectation.
• The Bank of Japan held a monetary policy meeting and decided to adjust the current policy interest rate from 0% – 0.1% to 0.25%.
Iron Ore Key Indicators:
• Platts62 $100.95, +1.95, MTD $105.94. Iron ore rebounded during the current two trading days following BHP derailment, China politburo stimulus, global equity recovery, depreciation on US dollar, dovish US Federal decision, steel price protection in China and busy physical enquiries. The mid-run pressure maintained as high delivery and port stocks. However in short-run, NHGF became tight supplied, some Brazil sources deliveries were in high demand as well.
SGX Iron Ore 62% Futures& Options Open Interest (Jul 31st)
• Futures 107,071,500 tons(Decrease 20,577,100 tons)
• Options 137,180,500 tons(Decrease 30,673,500 tons)
Steel Key Indicators:
• Tangshan average pig iron cost at 2537 yuan/ton. Average billet cost 3335 yuan/ton, down 18 yuan/ton. Average production loss at 215 yuan/ton, down 92 yuan/ton on the week.
Coal Indicators:
• The FOB coking coal market maintained decreasing trend, however price decrease was slowed down compared to past two weeks. The reversal would potentially follow after a real trade in future.
