Market Verdict on Iron Ore：
• Neutral.
Macro
• BOE increased interest rate by 50 basis points to 1.75%, created the biggest one-time hike during the past 27 years. BOE expect the inflation rate would reach roof area at 13.3% in this October. BOE expect U.K. economy would enter into recession from this Q4.
Iron Ore Key Indicators:
• Platts62 $103.80, -4.30, MTD $109.53. The term contract discounts for FMG in August widened in August, however market participants indicated that the current discounts were not great enough to attract buying interest. Mainstream seaborne cargoes including PBF, MACF, NMHG and JMBF were traded actively during the past two weeks. However the secondary market maintained quiet, indicating the demand market was yet to catch up with the fast increasing price on primary market.
• S&PGlobal Commodity Insights indicated at an event in Delhi that India potentially remove the export duty of pellets, which was imposed by 45% and created pessimistic impact on the export volume and price during past few months.
• MySteel 45 ports iron ore inventories at 137.04 million tons, up 1.69 million tons w-o-w. Daily evacuation 2.68 million tons, up 82,000 tons w-o-w. Australia iron ore 64.53 million tons, up 2.45 million tons w-o-w. Brazil iron ore 44.87 million tons, down 327,900 tons w-o-w. 74 ships at ports, up 5.
SGX Iron Ore 62% Futures& Options Open Interest (Aug 4th)
• Futures 90,464,100 tons(Decrease 186,500 tons)
• Options 85,510,000 tons(Increase 1,432,500 tons)
Steel Key Indicators
• 40 Chinese independent EAFs average cost 4144 yuan/ton, up 249 yuan/ton. Average profit 92 yuan/ton, down 21 yuan/ton.
Coal Indicators
• Chinese Ningxia and Inner Mongolia increased coke price by 200 yuan/ton after the previous slump about 1000 yuan/ton. However other provinces were in a wait-and-see mode.
