Market Verdict on Iron Ore：
• Neutral.
Macro
• China central bank PBOC decided to decrease foreign exchange deposit rate by 1% to 8%, effective from May 15th. CNH appreciated 389 basis points after a 1766 depreciation over the previous four trading days.
• US Treasury Secretary Yellen hinted that in order to get rid of the highest inflation in 40 years, the United States is open to reducing the tariffs on Chinese imports generally imposed during the Trump-Era.
Iron Ore Key Indicators:
• Platts62 $135.75, -14.75, MTD $153.23. One laycan of PBF was traded at fixed price last week, which was rarely seen over the last two months. The previous fixed price laycan was traded in early April. However seaborne trades were sluggish in general and very few interests are heard from buyers. Tangshan area reported that at least12-13% of steel capacity were stopped due to the pandemic. The city announced recovery industrial activities today, however the untimely temporary closure expected to become a normal status in the coming few weeks.
SGX Iron Ore 62% Futures& Options Open Interest (Apr 25th)
• Futures 84,757,600 tonnes(Increase 1,189,700 tonnes)
• Options 85,670,000 tonnes(Increase 1,031,000 tonnes)
Steel Key Indicators
• China Baosteel: the blast furnace low load operation of blast furnace became a long-run trend in steel making industry. Cost efficiency become more preferable compared with the refined concentrates.
Coal Indicators
• The Platts report indicated that there were at least three different mills sellers participating in the mills’ buy tender, Tata Steel concluded one long-waiting tender at $449/mt FOB Australia, down $60 because there were many unsold cargoes.
