Market Verdict on Iron Ore：
· Iron ore short-run neutral.
Macro
· China PM Li Keqiang pointed out at the meeting that to utilize market tools to solve major problems in economic such as rising commodity prices, promote science and technology innovation, expand domestic demand and promote opening up. Xi Jinping delivered an important speech and stressed that it is necessary to uphold science and technology as a strategic support for national development.
· China May PMI 51.0, est. 51.1, last 51.1.
· According to the statistics of the US Department of Commerce, the PCE price index of the US in April rose 3.6% year-on-year, 3.5% higher than expected, significantly higher than the previous value of 2.3%, the fastest growth rate since 2008, much higher than the official inflation target of the US Federal Reserve of 2%.
Iron Ore Key Indicators:
· Platts62 $189.55, +1.90, MTD $206.08. Iron ore port trades and seaborne trades volume both recovered as the recover of an oversold sentiment on futures market. However the growth on physical side was slower, indicating the previous policy to control overspeculation started to impact the market.
SGX Iron Ore 62% Futures& Options Open Interest (May 28th)
· Futures 89,866,100 tonnes(Increase 1,294,000 tonnes)
· Options 80,061,300 tonnes(Increase 445,800 tonnes)
Steel Key Indicators
· Steelbank construction steels inventory 6.18 million tonnes, down 0.13% w-o-w. HRC inventories 2.35 million tonnes, up 1.24% w-o-w.
· Tangshan billet up 200 yuan/tonne.
· India HRC started to correct as global HRC price corrected as well as Vietnam increased China import sources. China HRC price correct to $1030 to CFR Vietnam.
· Some listed steel companies indicated that the EAFs production cost reached breakeven point, a continuous production with high scrap price would potentially see a variable loss.
