Market Verdict on Iron Ore：
· Iron ore short-run neutral.
Macro
· According to Bloomberg’s survey of economists, it is expected that the Federal Reserve will begin to reduce its asset purchase plan next year, focusing on mortgage-backed securities.
· The strong typhoon landed on east China caused coastal area transportation stoppage and port closure. Downstream activities in Zhejiang and Shanghai were impacted through this weekends and coming three days.
· On July 23rd, the China Ministry of Housing and Urban Rural Development and other eight departments issued the notice on continuously rectifying and standardizing the order of the real estate market, which further increased the industry’s expectation of strict and tight regulation of the real estate market in the second half of the year. Shanghai, Shaoxing and Hangzhou “responded” to the real estate market regulation policy on July 23rd.
Iron Ore Key Indicators:
· Platts 62%: $201.90 (+0.40), MTD $216.98.
· U.S. miner Cleveland-Cliffs reported a year-on-year increase of 5.81 million tons of steel in the second quarter, of 5.25 million tons in the second quarter.
· Last week, the disturbance in the iron ore supply section was strong. BHP said that it would carry out “large-scale maintenance” activities in Port Hedland, its main export port of iron ore in the next three months. Vale announced that the restart of several mining projects would be delayed, while Anglo American lowered its iron ore sales guidelines due to railway restrictions and adverse effects on South Africa. A week earlier, Rio Tinto reported that its new mines in Australia would be delayed.
SGX Iron Ore 62% Futures& Options Open Interest (Jul 23rd)
· Futures 86,155,400 tonnes(Decrease 195,400 tonnes)
· Options 84,805,400 tonnes(Increase 1,717,500 tonnes)
Steel Key Indicators
· Environment inspection team started to re-check some steel mills capacity in Jiangsu Province. 