Ferrous Market
– Shanghai 16-25mm rebar consolidate from 3670- 3690 yuan for previous 6 weeks. However Rizhao PBF increased 18.63% during the same period. Thus many northern mills rebar profit has been squeezed to negative area. Mills started to think about decrease sintering ores and increase proportion of lumps, which currently running at historical low area. Some mills indicated they will start to overhaul during summer.
– China built 7 more steel mills during this year, 5 in east coastal areas, 2 in western areas.
– Mysteel researched 102 EAF operation rate at 75.59%, up 0.79% w-o-w. Utilization rate 62.81%, up 0.76% w-o-w.
Macro and Downstream
– China Indices Research Institution indicated 300 sample cities housing land area 600 million square meters, down 7.5% m-o-m, 400 million square meters traded down 5.9% m-o-m. Land sales are cooling down significantly.
SGX Iron Ore 62% Futures& Options Open Interest(Aug 20th)
– Futures 83,063,100 tonnes(increase 333,800 tonnes)
– Options 123,716,900 tonnes(increase 3,070,000 tonnes)
Verdict
– Short-term bearish.