Market Verdict on Iron Ore：
• Neutral.
Macro
• U.K. PMI 53.4, created the lowest from July 2020, est. 53.7, last 54.6.
• Global energy bureau predicted the investment in energy would increase 8% in 2022, equivalent to 2.4 trillion U.S. dollars, mainly contributed by green energy sources and power grid.
Iron Ore Key Indicators:
• Platts62 $116.05, +6.65, MTD $132.77. Float base iron ore premium dropped massively from $2.8 to $0.45 over the last ten trading days with no bids. Mainstream iron ores didn’t saw any active buyers during this week although improving import margins. The steel margin was suffering a loss. As expected, iron ore eroded steel mills margin and made an overdraft of growth in advance. Thus, mills are currently utilising premier coking coals to increase reducibility of low grade iron ore, which could reduce cost comprehensively. The 45% tax increase on Indian pellets and previous Ukraine supply disruption to Asian countries led to a global seaborne pellets shortage, which yet to see any alternative.
• BHP narrowed term contract discounts for July JMBF from 11% to 9.25%, widened discount for MACF from 2.75% to 4%.
• MySteel 45 ports iron ore inventories at 125.72 million tons, down 936,900 tons w-o-w. Daily evacuation 2.95 million tons, down 116,800 tons w-o-w. Australia iron ore 58.41 million tons, down 718,500 tons w-o-w. Brazil iron ore 42.43 million tons, down 387,300 tons w-o-w. 109 ships at ports, up 5.
SGX Iron Ore 62% Futures& Options Open Interest (Jun 23rd)
• Futures 95,132,200 tons(Increase 1,782,200 tons)
• Options 87,977,500 tons(Increase 2,409,500 tons)
Steel Key Indicators
• TS billet cost at 4334 yuan/ton, down 174 yuan/ton. Average steel margin -414 yuan, down 286 yuan/ton.
Coal Indicators
• The most competitive offer of FOB Australia offer was heard at $345/mt of HCCA Unbranded with July laycan. Met coal PLV plunged on strong selling interest because of the lackluster demand in China market.
