Market Verdict on Iron Ore：
• Neutral.
Macro
• German CPI refreshed 50-year-high, supported the rationale to increase 50 basis points in July.
• The EU agreed to ban 90% of Russia’s oil imports by the end of 2022.
Iron Ore Key Indicators:
• Platts62 $136.60, +2.15, MTD $133.34. Seaborne PBF gathered interests after import margin improved significantly. Iron ore seaborne trades significantly increased on last Friday and this Monday. Rio Tinto sold few laycans of Fe61% PBF on fixed price. BHP sold JMBF discount at $9-10. However steel mills margin was in 0 area, the marginal profit of some northern mills were even negative, which resist the big spike of current materials in mid-run level. Virtual steel margin was squeezed to extreme low area because iron ore increased faster than steel.
• NDRC held conference on starting new iron ore projects to increase the domestic capacity.
SGX Iron Ore 62% Futures& Options Open Interest (May 30th)
• Futures 84,246,200 tons(Increase 1,556,900 tons)
• Options 84,641,000 tons(Increase 155,000 tons)
Steel Key Indicators
• European Steel Association indicated that European steel consumption potentially narrow 2% because of the war and supply chain disruption.
Coal Indicators
• Indian Energy Bureau indicated that the import coals were used to generate electricity. India imported coal first time from 2015.
• The inverse correlation between PLV and PCI raised concerns on physical traders, relative high PCI price was believed unsustainable with alternatives for example low vol HCC, or thermal coals.
