Ferrous Market
– China August Manufacture PMI 51.0, est. 51.2, last 51.1.
– Tangshan execute environment production restriction on August 31st, the third environment curb over past two weeks. Physical steels push up significantly after hearing the curb. Northern ports operation are impacted by typhoon weather over weekends and expected to recover on Tuesday after Typhoon shift to Korea.
– Some Australia iron ore at September laycans are delayed because of Australia port overhaul, but expected to catch up delivery in October.
– Northern mills rebar are produced on or below 0 margin per tonne, mills are shifting furnace input to low grade or discounted ores.
Macro
– China Prime Minister, Li Keqiang said to ensure the liquidity efficiency from new monetary policy. China will increase 200 million yuan deficit as special Treasury against pandemic.
– China changed the new resource tax law to simplise the application process.
SGX Iron Ore 62% Futures& Options Open Interest(Aug 28th)
– Futures 88,061,700 tonnes(increase 1,088,800 tonnes)
– Options 127,491,900 tonnes(increase 580,000 tonnes)
Verdict
– Short-term neutral.