Market Verdict on Iron Ore：
• Neutral.
Macro:
• The annual rate of CPI in the U.S. in December was 6.5%, expected 6.50%, and the previous value was 7.10%.
• Research Center of the Chinese Academy of Sciences: China’s economy condition maintain resilient in 2023, and the annual GDP growth rate is expected to be about 6.0%. According to the report, the contribution of consumption, investment and net export to GDP growth was 3.5, 1.5 and 1.0 percentage points respectively.
Iron Ore Key Indicators:
• Platts62 $123.65, -0.35, MTD $120.02.The market are preparing Brazil iron ores since the significant decreased deliveries in current weeks. IOCJ and IOC6 are both popular on seaborne market. Downstream market of China approaching an end before Chinese New Year in late January. The winter iron ore stock for Chinese mills entered a end with Chinese New Year looming, with most of stocks were purchased in portside, with flexible size and time. Steel mills suffered negative production margin because the uptick of raw materials and low steel sales. The market expected a correction on iron ore with lower marginal demand.
SGX Iron Ore 62% Futures& Options Open Interest (Jan 12th)
l Futures 101,548,900 tons(Increase 622,500 tons)
• Options 75,905,100 tons(Increase 2,105,000 tons)
Steel Key Indicators:
• Mysteel researched 40 independent EAFs average cost 4228 yuan/ton, up 11 yuan/ton. Average profit 33 yuan/ton, up 49 yuan/ton.
Coal Indicators:
• The import ban of Australian coal is lift in China. There is not quota limit for import enterprises. However, the enterprises said that the price of Australian coal has reached a relatively high level, and the cost performance ratio has been lost after adding freight. In addition, due to the limited size of Australia export coals, it is difficult to achieve a large scale of purchases.