Market Verdict on Iron Ore：
• Neutral to bullish.

 

Macro
• China PBOC decreased foreign reserve ratio from 8% to 6% to neutralise the depreciation risk on Chinese Yuan, which was the second time cut on this ratio within the year.
• Chinese financial department statistics indicated that total debt issuance at 352 million yuan to the end of August, which was earlier than previous four years. Chinese NDRC urged to accelerate the construction progress in Q3.

 

Iron Ore Key Indicators:
• Platts62 $98.00, +3.00, MTD $96.20. The structure curve was still believed at narrow area since the medium over last 12 months was $0.57 for the next months and the following month contract, i.e. Oct22-Nov22. However the spread currently was in $0.4-0.45. PBF and NMHG regained popularity, with significantly improved volume in late half of August and discount/premium. Chinese northern ports has over 6 million tons of pellets, which hasn’t no change since June. However India mills were anxious about their pellets inventories on hand. The premium was hitting three-year-low, given the high export tax.
• Chinese 45 iron ore import ports arrived 18.24 million tons of iron ores, down 4.93 million tons on the week. Northern 6 ports arrived 11.04 million tons, up 40,000 tons on the week.
SGX Iron Ore 62% Futures& Options Open Interest (Sep 5th)
• Futures 92,911,000 tons(Increase 2,699,500 tons)
• Options 81,608,600 tons(Increase 18,500 tons)

 

 

Steel Key Indicators
• Mysteel sample steel mills iron ore inventories at 97.4 million tons, down 1.27 million tons on the weeks. Daily import iron ore consumption at 2.83 million tons, up 51,000 tons on the week.
• MySteel researched 85 independent EAFs, with operation rate at 56.74%, up 2.92% on the week. Average utilisation rate at 45.83%, up 6.41% on the week.

 

Coal Indicators
• Chinese 247 steel mills coke average production 472,100 tons. Coke inventories 6.14 million tons, up 241,000. Steel mills have 11.71 useable days on coke, up 0.5 days on the week. Coking coal inventories 8.10 million tons, down 39,000 tons on the week. Steel mills have 12.89 useable days on coking coal.