Ferrous Market
– Steelbank Inventory: construction steel inventories 3.92 million tonnes, down 12.67% w-o-w. HRC 1.58 million tonnes, down 8.68%.
– Tangshan 8 mills average pig iron pre-tax cost 2446 yuan/tonne, billet after-tax cost 3181 yuan/tonne, up 2 yuan/tonne. Gross profit 449 yuan/tonne, up 48 yuan from last week.
– Peru Mining statistic indicated iron ore September production at 1.02 million tonnes up 35.9% y-o-y. Jan –Sep iron ore production 5.63 million tonnes, down 19% y-o-y.
– Platts 62% reached arround $130, China 6 northern ports major mid-grade concentrates inventories slight picked up last week. Some physical traders are not willing to accept PBF premium at $3-3.5 since the high index.
Macro
– Most areas in China entered a rainy and snowy weather from this week. Northern and mid China industry activities expected slower seasonally.
SGX Iron Ore 62% Futures& Options Open Interest(Nov20th)
– Futures 70,414,500 tonnes(increase 1,443,300 tonnes)
– Options78,334,500 tonnes(increase 230,000 tonnes)
Verdict
– Short-term neutral to bearish