Verdict:
• Short-run Neutral.
Macro:
• China NBS: China manufacturing PMI August at 49.1%, down 0.3% on the month.
• Reuters: Six OPEC+ sources indicated to increase oil production as planned from October, as Libya suspended production and some member countries promise to cut production to fill up for excess quotas, offsetting the impact of sluggish demand. The eight member countries of OPEC+ plan to increase their production by 180,000 barrels per day in October as part of starting to lift the recent reduction of 2.2 million barrels per day, while continuing to implement other production reduction measures until the end of 2025.
Iron Ore Key Indicators:
• Platts62 $100.25, -1.00, Aug AVG $98.70. The low steel margin in China spurred demand on low grade in 2024. In addition, Indian export tax on iron ores had decreased the market share of Indian fines significantly in seaborne market. FMG narrowed discount for its major products. SSF was narrowed from 15% to 13.25% after maintaining unchanged for four months. WPF narrowed from 9.75% to 7.25%. FBF narrowed from 9% to 6.5%.
SGX Iron Ore 62% Futures& Options Open Interest (Aug 30th)
• Futures 125,123,000 tons(Decrease 23,113,500 tons)
• Options 144,396,100 tons(Decrease 24,894,600 tons)
Steel Key Indicators:
• Yongsteel Group EXW rebar price up 200 yuan/ton at 3500 yuan/ton, wire rods up by 150 yuan/ton at 3760 yuan/ton. Shagang Group increased EXW rebar price by 50 yuan/ton at 3500 yuan/ton, wire rods by 50 yuan/ton at 3510 yuan/ton.
• China 87 EAFs average utilisation rate at 30.53%, down 3.66% on the month, down 22.24% on the year.
Coking Coal and Coke Indicators:
• After the seventh physical coke price cut landed, China market was waiting for the reversal by a price hike during this week. The FOB coking coal market was stable during the second half of last week.