Ferrous Market
– Australia port maintenance estimate cause iron ore decrease on delivery arround 2.17 million tonnes. Brazil maintenance impact 507,000 tonnes. However Australia and Brazil delivery to China proportion both increased, Australia and Brazil iron ore delivery also approaching 4 month high.
– Port stock increase enables steel mills have more alternative strategy to blend concentrates and manage iron ore cost. On the other side, winter China domestic miners capacity down seasonally, and fast pick up coke price will support mainstream iron ore and high grade iron ore price.
– MySteel Australia and Brazil iron ore total delivery at 27.97 million tonnes, up 2.51 million tonnes. Australia iron ore delivery 20.27 million tonnes, up 1.69 million tonnes w-o-w. Australia delivery to China 16.35 million tonnes, up 398,000 tonnes w-o-w. Brazil iron ore delivery 7.7 million tonnes, up 821,000 tonnes w-o-w.
– China Iron ore 45 port arrivals at 25.82 million tonnes, up 866,000 tonnes w-o-w. Northern six port arrivals at 13.58 million tonnes, up 430,000 million tonnes w-o-w.
– National Bureau Statistic: Jan – Sep China iron ore production 636 million tonnes, up 2.6% y-o-y. Jan – Sep Coke production 35.09 million tonnes, down 0.9% y-o-y. Jan – sep coal production 2.79 billion tonnes, down 0.1% y-o-y.
Macro
– China National Health Comission expect 610 million Covid-19 Vaccines produced by the end of 2020.
– China National Statistic Bureau: September four Tier 1 city new and second-hand commercial houses sells price up 0.4% and 0.9% respectively compared to August, up 3.9% and 7.4% respectively compared to same period last year.
SGX Iron Ore 62% Futures& Options Open Interest(Oct 20th)
– Futures 74,129,600 tonnes(increase 630,500 tonnes)
– Options 95,089,300 tonnes(increase 1,100,000 tonnes)
Verdict
– Short-term bearish.