Market Verdict on Iron Ore：
· Neutral to bearish.
Macro
· U.S. previous week initial jobless claim reached 184,000, created the lowest since the year 1969. Estimated 220,000, last 222,000.
· China central bank decided to increase foreign exchange deposit reserve rate from 7% to 9%, to hedge the appreciation risk of Chinese Yuan, CNH once depreciated 350 basis points after this announcement.
Iron Ore Key Indicators:
· Platts 62%: $106.70 (-0.30) MTD $102.99. Steel mills were conservative on the production schedules, which created a bottleneck on marginal demand for iron ores. However back month spreads become stronger, indicating the resilience on the next Q1 and Q2. Seaborne market becomes quiet again.
· MySteel 45 ports iron ore inventories at 154.85 million tonnes, up 279,800 tonnes w-o-w. Daily evacuation 2.797 million tonnes, up 36,300 tonnes w-o-w. Australia iron ore 71.99 million tonnes, up 360,200 tonnes w-o-w. Brazil iron ore 55.71 million tonnes, up 97,500 tonnes w-o-w. 161 ships at ports, up 9.
· DCE new deliverable iron ore value expected to decrease by 20- 40 yuan/tonne that previous contract, which caused an intraday correction yesterday.
· China 247 blast furnace operation rate 68.14%, down 1.66% w-o-w, down 16.63% y-o-y. Daily pig iron production 1.99 million tonnes, down 18,100 tonnes w-o-w.
SGX Iron Ore 62% Futures& Options Open Interest (Dec 9th)
· Futures 81,991,700 tonnes(Increase1,181,000 tonnes)
· Options 56,009,000 tonnes(Increase 40,000 tonnes)
Steel Key Indicators
· Mysteel researched 247 blast furnace operation rate at 69.79%, up 0.14% w-o-w. Utilisation rate 74.8%, down 0.43% w-o-w. Daily pig iron production 2 million tonnes, down 11,700 tonnes.
Coal Indicators
l The number of daily coal trucks from Mongolia to Ganqimaodu fell below 100 trucks on Dec 7th, down from 300 trucks per day in the week ended Dec 3th.
l Asian- pacific area coking price up 2$ on premium low vol coking coal yesterday valued by Platts, the sentiment was driven by the wet weather concern in Australia. Customs indicated both Australia delivery ports and China northern ports are severely delayed. 