Iron Ore and Steel Market Updates
– The low grade fines and discounted fines are becoming higher versus major brands iron ores, indciated steel mills are thinking of controling production cost.
– China Jan – May cement production at 769 million tonnes, down 8.2% y-o-y. However may cement production at 249 million tonnes, up 8.6% y-o-y, the highest single month of cement growth rate historically.
– Sichuan Province, China, is planning to build and operate 29 new EAFs with total investment of 47.29 billion yuan.
– Steelbank: construction steel inventories at 6.8 million tonnes down 2.07% w-o-w. HRC invnetories at 1.81 million tonnes down 8.68% w-o-w.
Macro
– China one-year loan prime rate at 3.85%, unchanged from last time and fall in expectation. Analysts expected the next interest cut windown will be in August.
SGX Iron Ore 62% Futures& Options Open Interest(Jun 19th)
– Futures 70,972,000 tonnes(increase 46,800 tonnes)
– Options 117,169,100 tonnes(increase 875,000 tonnes)
Verdict
– Short-term neutral to bearish. (by Hao Pei)