Verdict:
• Short-run Neutral.
Macro:
• DCE: From trading on April 26th, non-futures company members or customers were not allowed to open more than 500 lots per day on May24 and Sep24 contracts. For other contracts, less than 2000 lots per day.
• Anglo American Q1 iron ore production at 15.14 million tons, up 10% on the quarter, unchanged on yearly basis. The production guidance maintained unchanged at 58 – 62 million tons.
Iron Ore Key Indicators:
• Platts62 $118.85, +5.20, MTD $109.30. The hike in paper market in past two days drive up sentiment of physical trades. There were three laycans of PBFs trades and one MACF trade yesterday. Virtual steel margin dropped to -108 yuan/ton. At the same time, physical margin potentially drop to negative as the physical coke in China started three rounds of price increase in past two weeks. Semi-finished steels and finished steels were rather cautious on price change. The rebound should be less sustainable. The price potentially retreat after the stock of China Labor Day holiday called an end.
SGX Iron Ore 62% Futures& Options Open Interest (Apr 24th)
• Futures 120,713,200 tons(Increase 495,100 tons)
• Options 145,537,900 tons(Increase 5,180,000 tons)
Steel Key Indicators:
• Tangshan major steel mills billet cost 3343 yuan/ton, up 43 yuan/ton from last week. Average steel making profit at 127 yuan/ton, up 7 yuan/ton.
• CISA statistic indicated that crude steel daily production at 2.1188 million tons, up 0.33% on the week, down 7.47% on the year.
Coal Indicators:
• China cokery plants were proposing for the third round of physical coke price hike landing.
