Ferrous Market
– Steelbank Inventory: rebar inventories 7.45 million tonnes, down 2.23% w-o-w. HRC inventories 2.08 million tonnes, down 1.98% w-o-w.
– The sintered iron ore production curb impact is limited observed from production data. Moreover the winter production curb potentially out in October. Spot lump and pellets growth are limited believed by some mills.
– Europe area blast furnace recovered 9 million tonnes of steel-making capacity. U.S. recovered 10 million tonnes of steel capactiy. India and Russia are gradually recover steel-making capacity from August.
– China steel industry will concentrate 60-70% production into top 10 steel mills by the year 2025, according to a steel capacity instruction sent by China state council.
China Macro
– China National Bureau Statistics August macro data indicated august economic activities will increase, in particular infrastructure and industrial activities. However some security economists indicated the recover of consumption should be slower since pandemic impact is lasting through the year.
SGX Iron Ore 62% Futures& Options Open Interest(Sep 11th)
– Futures 83,107,100 tonnes(increase 1,845,000 tonnes)
– Options 109,220,500 tonnes(increase 750,000 tonnes)
Verdict
– Short-term neutral.