Market Verdict on Iron Ore：
• Neutral to bullish.

 

Macro：
• BOE hiked interest rate by 50 bps to 2.25%, in line with expectations.
• The Asian Development Bank released a report of Asian Development Outlook 2022, and lowered the economic growth forecast of developing Asian economies to 4.3% this year, compared with 5.2% previously.Economic growth forecast for 2023 was also lowered to 4.9% from 5.3%. The ADB lowered China’s economic growth forecast this year to 3.3%.

 

Iron Ore Key Indicators:
• Platts62 $98.75, +2.35, MTD $98.89. Market saw several CSN cargoes traded including IOC6. 6.5-9% silicon differential fell by 35% to $4, market expect the differential could see some support, with the upcoming Golden week and National congress in China, which would cause 3-4 week length maintenance in downstream or mills. The structure curve of Oct-Nov22 maintianed inthe range from $0.45 to $0.55, close to the medium of $0.45 tracing the previous 12 months. PBF and NMHG regained popularity, with significantly improved volume in late half of August and discount/premium, however market participants believed that the current level was close to roof area as there were not enough room on the steel margin left. Thus, low grade and discount iron ores including JMBF regained market interest with narrowing discounts. ITG sold 150,000mt PBF to Majestic Rock Resources Group during MOC at October Index + $0.45. CSN sold multiple laycans of IOC6 at October Index with a discount of $4.6- 4.75 this week, currently market saw improving interest in high silica products.
• MySteel 45 ports iron ore inventories at 131.84 million tons, down 5.35 million tons w-o-w. Daily evacuation 3.15 million tons, up 353,600 tons w-o-w. Australia iron ore 59.09 million tons, down 3.69 million tons w-o-w. Brazil iron ore 45.98 million tons, down 398,300 tons w-o-w. 111 ships at ports, up 42.Iron Ore 62% Futures& Options Open Interest (Sep 22nd)
• Futures105,244,600 tons(Increase 1,588,900 tons)
• Options 91,974,100 tons(Increase715,000 tons)

 

Steel Key Indicators：
• World Steel statistic August crude steel production 150.6 million tons, down 3% year-on-year.
• MySteel estimated 40 EAFs average rebar cost 4190 yuan/ton, down 54 yuan/ton. Average loss 179 yuan/ton.

Coal Indicators：
• Australia FOB coking coal up $6 yesterday to $256.5, leaving the $250 range, with a 75,000mt Goonyella PMV traded at $255.
• MySteel estimated 30 cokery plants with average coke production loss at 800 yuan/ton.