Market Verdict on Iron Ore：
• Neutral.

 

Macro
• The U.S. House passed Inflation Reduction Act in 2022. The Act will focus on increase company taxes, reaction to environmental changes, decrease prescription medicines and decrease financial deficit.
• Chinese July new issued loans 679 billion yuan, M2 up 12% on the year. The difference between M2 and social financing expanded to 1.3%, created the highest since 2006.
• China Jan- Jul fixed-asset investment 3.198 trillion yuan, up 5.7%, est. 6.2%, last 6.1%. China Jan – Jul desiganated above scale industrials added value up 3.5%, est. 3.5%, last -0.7%. China Jan – Jul housing investment -6.4%, est. -5.5%, last -5.4%

 

Iron Ore Key Indicators:
• Platts62 $108.85, -1.75, MTD $109.08. The current market interests were centered around mid-grade including PBF and NMF, because of the cost-efficiency and production recovery in China. In addition, the demand raw materials recovered significantly in southeastern mills. The term contract discounts for FMG and BHP in August widened. However be aware of PBF was slight oversupplied in seaborne market, which might limit the room of growth in the near future.
• MySteel 45 ports iron ore inventories at 138.86 million tons, up 1.82 million tons w-o-w. Daily evacuation 2.73 million tons, up 48,100 tons w-o-w. Australia iron ore 64.43 million tons, down 100,600 tons w-o-w. Brazil iron ore 46.1 million tons, up 1.227 million tons w-o-w. 81 ships at ports, up 7.
SGX Iron Ore 62% Futures& Options Open Interest (Aug12th)
• Futures 94,597,400 tons(Decrease 318,000 tons)
• Options 91,106,900 tons(Increase 700,900 tons)

 

Steel Key Indicators
• UK government was planning on an option to increase support of policy exemption on high energy consumed industry including steel making from 85%to 100%.
• MySteel estimated 85 individual EAFs average operation rate at 57.34%, up 1% on the month, down 12.96% on the year.
• Early August major Chinese steel mills crude steel daily production 1.94 million tons, up 2.81% from late July. Pig iron daily production 1.79 million tons, up 2.01% from late July.

 

Coal Indicators
• Chinese mills and coke plants were negotiating the second and third rounds of coke price increase.
• MySteel 16 Chinese ports coking coal inventory 5.857 million tons up 25,000 tons on the week.