Ferrous Market
– Steelbank: construction steel inventories 3.63 million tonnes, down 7.4% w-o-w. HRC inventories 1.45 million tonnes, down 8.42% w-o-w.
– Vale was approved to recover production in Serra Leste miner, expected total production 4-5 million tonnes in the year 2021, and reached 6 million of annual production in the year 2022.
– Tangshan 10 sample steel mills pig iron before tax 2462 yuan/tonne, billet cost 3199 yuan/tonne, up 18 yuan/tonne w-o-w. Gross profit 381 yuan/tonne, down 38 yuan/tonne.
– China approved the benchmark of DRI and HBI in Nov 29th, expected to carry out in late December. Market also expect related import on DRI and HBI will start next year. DRI and HBI are renewable ferrous, which also generate less pollution and increase steel making efficiency.
Macro
– China November PMI 52.1. Est. 51.5. Last 51.4. China steel November PMI 49.3, up 3.5% from October.
SGX Iron Ore 62% Futures& Options Open Interest(Nov27th)
– Futures 75,348,300 tonnes(increase1,491,500 tonnes)
– Options 80,244,500 tonnes(increase 360,000 tonnes)
Verdict
– Short-term neutral