Verdict:
• Short-run Neutral.
Macro:
• Vale’s Q1 iron ore production was 70.837 million tons, a decrease of 20.8% month on month and a year-on-year increase of 6.1%. In the first quarter, the sales of iron ore were 63.83 million tons, a decrease of 29.3% compared to the previous quarter and a year-on-year increase of 14.7%. The guidance production of iron ore remained unchanged at 310-32 million tons.
• Rio Tinto’s Pilbara iron ore production reached 77.9 million tons, a decrease of 11% month on month and 2% year-on-year. 78 million tons were shipped in the first quarter, a decrease of 10% month on month and 5% year-on-year.
• The IMF has raised its global economic growth forecast for 2024 to 3.2%, which is 0.1% higher than the January forecast. It is expected that the overall global inflation rate will decrease from an average annual rate of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025.
Iron Ore Key Indicators:
• Platts62 $110.40, -2.65, MTD $105.17. In April, the demand for seaborne ores began to significantly increase. Buyers normally enter when market saw a correction in April, which was quite different from the chasing high strategies previously. There were a floating price PBF and fixed price PBF traded yesterday. On the macro side, some pressure from pullback of the metal sector once resisted ferrous. However, as the general low valuation on steel sector compared with other metals, they should have some safety margin.
SGX Iron Ore 62% Futures& Options Open Interest (Apr 16th)
• Futures 113,112,100 tons(Decrease 1,248,800 tons)
• Options 128,890,900 tons(Increase 2,573,500 tons)
Steel Key Indicators:
• China FOB HRC SS400 traded at $515/mt last week, unchanged from previous week.
Coal Indicators:
• The FOB coking coal up by $25.33 to $252.33, pushed by a bilateral trade for 40,000mt PMV. There were consistent buyers after miner concluded interests. Thus, offers jumped high. The index refreshed the biggest single day growth during the past two months.
