Market Verdict on Iron Ore：
· Iron ore short-run neutral to bearish.
Macro
· On May 18, China’s National Development and Reform Commission(NDRC) held a regular press conference: the NDRC and the General Administration of Market Supervision are jointly investigating the market conditions of steel and iron ore. “We will accelerate the construction of new domestic iron ore projects and in-process projects, and encourage qualified enterprises to actively and steadily develop overseas iron ore resources. Make full use of domestic and international markets and resources to ensure iron ore supply.
Iron Ore Key Indicators:
· Platts62 $223.75, +6.75, MTD $211.44. PBF traded at a fixed price at weekly high yesterday at $219.5, calculated to $223.1 based on 62% ferrous content. Seaborne massively climb yesterday.
· China Zhongda Mineral indicated the company planned to increase iron ore capacity to 15 million tonnes. The company produced 5.27 million tonnes of iron ore in the year 2020.
SGX Iron Ore 62% Futures& Options Open Interest (May 18th)
· Futures 84,126,200 tonnes(Increase 102,700 tonnes)
· Options 75,418,000 tonnes(Increase 416,000 tonnes)
Steel Key Indicators
· From May 18 to 20, Tangshan city is expected to have a mild pollution process with ozone as the primary pollutant. In order to effectively deal with this round of pollution process, from May 18 to 20, sintering machines of iron and steel enterprises will stop production.
Coal Indicators
· A physical coke trader heard some steel plants are ready to lower the physical coke bids. The total coke inventory is still declining, however expected to pick up in next few weeks. Some futures and physical arbitraging positions are starting to take gains, which increase the supply of physical coke. Warehouse warrant coke started to become more expensive than spot, indicating a potential overvalue of spot coke.
