Ferrous Market
– BHP Pilbara iron ore production 70.4 million tonnes, down 5% from Q3, up 3% y-o-y. Year 2020 iron ore production 288 million tonnes, up 6% y-o-y. Q4 sales 70.77 million tonnes, down 4% from Q3, up 2% y-o-y. Year 2020 sales 290 million tonnes, up 6% y-o-y. BHP fiscal year 2021 iron ore production target 277 – 288 million tonnes, slight up from last prediction 2.76- 2.86 million tonnes.
– MySteel Australia and Brazil iron ore total delivery at 21.34 million tonnes, down 1.5 million tonnes w-o-w. Australia iron ore delivery 15.34 million tonnes, down 2.5 million tonnes w-o-w. Australia delivery to China 13.12 million tonnes, down 1.72 million tonnes w-o-w. Brazil iron ore delivery 6 million tonnes, up 1 million tonnes w-o-w.
– China December flat steel export 3.03 million tonnes, up 11.5% y-o-y. China 2020 flat steel export 32.73 million tonnes, down 15% y-o-y.
– Iron ore port inventories are structurally short on Carajas and Newman, which also supported mid and high grade iron ores. However northern China steel mills production margin went into negative area. Eastern mills steel production margin around 50 yuan/tonne expected this week. Mills are planning to use some low grade fines to decrease the average iron ore cost.
Macro
– U.S. Secretary of Treasurer Nominator, Yellen believed the U.S. dollar currency is market driven, U.S. did not seek weak dollars to obtain economic advantages.
SGX Iron Ore 62% Futures& Options Open Interest(Jan 19th)
– Futures 77,907,600 tonnes(increase 1,555,100 tonnes)
– Options 44,819,200 tonnes(increase 395,000 tonnes)
Verdict
– Short-term neutral