Market Verdict on Iron Ore：
• Neutral.
Macro
• U.S. FOMC decided maintain the interest rate range at 0-0.25%, which fell in the expectation of market. Federal accelerate the Taper and decrease 30 billion U.S. dollars equivalent debt purchases each month, previous decrease by 150 billion dollars. The FOMC matrix indicated that commissioners expected three interest rate increase from the year 2022 to the year 2023, 25 basis points each time to control the inflation growth.
• China central bank PBOC assembled beneficial rate of loans to small capital enterprises from the year 2022 to June 2023. China central bank decreased RRR by 0.5%, equivalent to 1.2 trillion yuan long-term funds.
• China National Statistic Bureau indicated the Jan-Nov housing investment up 6%(Jan –Oct up 7.2%), infrastructure investment up 0.5%(Jan- Oct up 1%) and manufacturing investment down 13.7%( an- Oct up 14.2%).
Iron Ore Key Indicators:
• Platts 62%: $109.70 (+1.45) MTD $104.70. China northern ports slightly recovered early this week compared to futures market. In addition, seaborne trades were light during the week, since physical traders believed the SGX iron ore went up too fast, and expecting a small retreat or consolidation in short-run. The negative front spreads and the strong spreads after March indicated the market concerning the Chinese New Year, pandemic spread and winter production curb before March. However market believed these factors potentially gone after downstream recovered from March.
SGX Iron Ore 62% Futures& Options Open Interest (Dec 15th)
• Futures 87,445,800 tonnes(Increase 962,200 tonnes)
• Options 58,790,000 tonnes(Increase 1,170,000 tonnes)
Steel Key Indicators
• Tangshan average steel mills billet cost 3982 yuan/tonne, down 8 yuan/tonne w-o-w. Steel profit margin 348 yuan/tonne, down 22 yuan/tonne w-o-w.
• International stainless steel Forum (ISSF) recently released statistics that the global crude stainless steel output increased by about 16.9% to 42.98 million tons in the first three quarters of 2021. The growth of Europe was about 17.9% to 5.41 million tons, and the US growth rate was about 16.1% to 1.83 million tons, and the Chinese mainland increased by 8.8% to 23.83 million tons, excluding Chinese mainland, South Korea and Indonesia. Asia (mainly India, Japan and China Taiwan) grew by about 25.6% to 5.77 million tons, while other regions (mainly Indonesia, South Korea, South Africa, Brazil and Russia) grew by about 50% to 6.14 million tons. In the third quarter of 2021, the global output of stainless steel reached 13.95 million tons, down by nearly 3.9% compared with the previous quarter.
Coal Indicators
• China Yulin area started a safety inspection in winter from Dec 15th 2021 to Jan 15th 2022. 