Ferrous Market
– MySteel Rebar Inventory: Rebar production 3.45 million tonnes, down 1.18% w-o-w. Mills inventory 2.76 million tonnes, up 6.27% w-o-w. Circulation inventory 4.25 milliontonnes, up 7.51% w-o-w.
– Fe Limited planed to ship JWD iron ore from the Q2 2021. The miner expected to start operation in Q1 2021.
– Brazil high silicon iron ore discount is expanded since more penalties on high silicon. However the high grade with low aluminum and silicon Brazil iron ores are currently experience a shortage on China ports.
– MySteel daily construction steels trade volume decreased from 200,000 tonnes/day early last week to 130,000 tonnes/day over past two days, indicating the construction steel demand is weakened.
– Tangshan 10 sample steel mills pig iron before tax 2934 yuan/tonne, billet cost 3737 yuan/tonne, up 86 yuan/tonne w-o-w. Gross profit 73 yuan/tonne, down 76 yuan/tonne.
– China Shandong steel mills have maintenance and impact 13% steel production in Shandong province.
Macro
– China December auto sales up 6.4% y-o-y. Year 2020 auto sales down 1.9% y-o-y. Analysts expect auto sales recover to positive growth rate in the year 2021.
SGX Iron Ore 62% Futures& Options Open Interest(Jan 13th)
– Futures 71,262,000 tonnes(increase 1,166,100 tonnes)
– Options 42,649,200 tonnes(increase 100,000 tonnes)
Verdict
– Short-term neutral to bearish