Market Verdict on Iron Ore：
• Neutral.
Macro
• Reuters: a market source indicated that G7 has initiated talks with China and India regarding to the price ceiling on crude oil from Russia.
• China June official PMI 50.2, est. 50.5, last 49.6.
Iron Ore Key Indicators:
• Platts 62%: $123.20 (-1.80) MTD $130.47. PBF saw improving trade activities in seaborne market. The physical July and August iron ore structure become contango since market participants believed that the bottom of the market was approaching. Chinese steel mills expect margin could recover with initiative control on production in June and July. Thus, Chinese blast furnace utilisation rate expected to drop in the coming few weeks. BHP narrowed term contract discounts for July JMBF from 11% to 9.25%, widened discount for MACF from 2.75% to 4%. Silicon penalties in 4.5-6% range dropped from $4 to $3, suggesting mills tolerance on variety of brands, to comprehensively decrease the cost of materials.
SGX Iron Ore 62% Futures& Options Open Interest (Jun 29th)
• Futures 97,744,800 tons(Decrease 314,000 tons)
• Options 90,288,500 tons(Increase 518,500 tons)
Steel Key Indicators
• Tangshan mills average billet cost 4347 yuan/ton, up 12 yuan/ton, average loss 307 yuan/ton on production.
Coal Indicators
• China Shanxi province planned to increase 50 million coal capacity in 2023 on the year, reaching 1.35 billion tons.
• The second round of Chinese coke cut postponed, market sentiment warmed.
