Market Verdict on Iron Ore：
• Neutral.
Macro
• The Bank of England unexpectedly raised interest rates by 15 basis points in borrowing costs for the first time in the current three years, due to a concerns over pandemic and the highest inflation for the past decade.
• From December 15th, 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.
Iron Ore Key Indicators:
• Platts62 $114.70, +5.00, MTD $105.53. 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.
• MySteel 45 ports iron ore inventories at 156.96 million tonnes, up 2.11 million tonnes w-o-w. Daily evacuation 2.86 million tonnes, up 64,100 tonnes w-o-w. Australia iron ore 72.96 million tonnes, up 961,800 tonnes w-o-w. Brazil iron ore 56.02 million tonnes, up 304,500 tonnes w-o-w. 149 ships at ports, down 12.
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SGX Iron Ore 62% Futures& Options Open Interest (Dec 16th)
• Futures 88,422,000 tonnes(Increase 976,200 tonnes)
• Options 60,075,000 tonnes(Increase 1,285,000 tonnes)
Steel Key Indicators
• MySteel researched 247 blast furnace utilisation rate 68%, down 0.14% w-o-w. Operation rate 74.28%, up 0.15% w-o-w. Daily pig iron 1.99 million tonnes, up 4,100 tonnes w-o-w.
Coal Indicators
• China 30 individual coking coal mills average profit 107 yuan/tonne. Shanxi prime coke profit 211 yuan/tonne.
