Market Verdict on Iron Ore：
· Neutral.
Macro
· China PBOC RRR released four positive signals including the stable economy growth, hedge the downside risk of economy, create a beneficial monetary environment for enterprises and indicate a manageable liquidity policy.
· The two parties of U.S. reached a consensus to increase the maximum debt ceiling to 2 trillion U.S. dollars.
Iron Ore Key Indicators:
· Platts62 $107.00 (-1.55) MTD $102.37. Steel mills were conservative on the production schedules, which created a bottleneck on marginal demand for iron ores. However back month spreads become stronger, indicating the resilience on the next Q1 and Q2.
Seaborne market become quiet again. Iron ore slightly corrected as the priced-in of the previous China RRR.
· China Customs: iron ore January to November import 1.04 trillion tonnes, down 3.2% y-o-y.
· The late November major crude steel daily production reached 1.72 million tonnes, down 2.61% from mid-November. Daily pig iron production 1.63 million tonnes, up 1.59% compared with mid-November.
SGX Iron Ore 62% Futures& Options Open Interest (Dec 8th)
· Futures 80,810,70 tonnes(Increase 567,700 tonnes)
· Options 55,969,000 tonnes(Increase 360,000 tonnes)
Steel Key Indicators
· MySteel Rebar Inventory: Rebar production 2.75 million tonnes, down 0.93% w-o-w. Mills inventory 2.05 million tonnes, down 10.41% w-o-w. Circulation inventory 3.88 million tonnes, down 6.09% w-o-w.
· Tangshan major steel mills billet cost 3990 yuan/tonne, up 48 yuan/tonne. Steel margin 370 yuan/tonne, up 22 yuan/tonne.
· CISA: China crude steel price growth in the year 2022 expected to be limited as weaker downstream demand and global environment.
· Hebei province completed the upgrading of steel industries. The province expected to complete low carbon facilities by the end of year 2022. Top 10 steel mills capacity expected to reach 70% of the capacity of Hebei province.
Coal Indicators
· Hebei province strictly control the new capacity increase on steel and coking industries during the next three years.
· Mongolia ports cleared 100 coal trucks daily during last week, which was far behind scheduled 600- 700 trucks daily, because the increase risk of pandemic.
