Metals, Ores, and Mining Firms, Mint Finance

Pranay Yadav

Metals, Ores, and Mining Firms

Deep Fundamental Analysis

Mint Finance

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Commodities

<ul>
<li>The lack of specific stimulus from China's 3rd plenary meeting and minor rate cuts led to a 2.5% decline in iron ore prices, highlighting market disappointment.</li>
<li>Despite a 13.7% MoM increase in iron ore imports, market concerns arise from stockpile accumulation rather than domestic consumption, suggesting potential future import slowdown.</li>
<li>SGX Iron Ore options showed a bearish trend with a weekly volume put/call ratio of 2.1 and notable put option increases for September and October expiries, indicating market pessimism.</li>
</ul>


The lack of specific stimulus from China's 3rd plenary meeting and minor rate cuts led to a 2.5% decline in iron ore prices, highlighting market disappointment.
Despite a 13.7% MoM increase in iron ore imports, market concerns arise from stockpile accumulation rather than domestic consumption, suggesting potential future import slowdown.
SGX Iron Ore options showed a bearish trend with a weekly volume put/call ratio of 2.1 and notable put option increases for September and October expiries, indicating market pessimism.


[Iron Options Weekly 2024/29] China’s Plenary Meeting and Rate Cut Fail to Enthuse Iron Ore Markets

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>Iron ore has remained rangebound between 95 and 130 USD/ton for three years, with cost-curve support kicking in on the higher cost curve at around 100 USD/ton.</li>
<li>Last week, quarterly operational updates released were for <a href="https://api.mziq.com/mzfilemanager/v2/d/53207d1c-63b4-48f1-96b7-19869fae19fe/7d5a19cc-4fa7-7ce9-a947-44dcefea9f27?origin=1" target="_blank" rel="noopener">Vale</a>, <a href="https://www.bhp.com/-/media/documents/media/reports-and-presentations/2024/240717_bhpoperationalreviewfortheyearended30june2024.pdf" target="_blank" rel="noopener">BHP</a>, <a href="https://www.angloamericankumba.com/~/media/Files/A/Anglo-American-Group-v5/Kumba/press-releases/2024/q2-2024-production-and-sales-report.pdf" target="_blank" rel="noopener">Kumba</a>, and <a href="https://www.mtgibsoniron.com.au/wp-content/uploads/2024/07/MGX-June-Quarter-2024-Activities-Report-Final.pdf" target="_blank" rel="noopener">Mount Gibson.</a> Except for BHP, all companies were disappointed due to provisional pricing impacts and mix changes.</li>
<li>Read our recent production preview <a href="https://www.smartkarma.com/insights/fortescue-metals-group-fmg-au-high-dividend-yield-of-9-what-to-expect-from-q4-fy24" target="_blank" data-smartkarma-citation="insights:151567" rel="noopener">Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24,</a> to be declared on the 25th of July. </li>
</ul>


Iron ore has remained rangebound between 95 and 130 USD/ton for three years, with cost-curve support kicking in on the higher cost curve at around 100 USD/ton.
Last week, quarterly operational updates released were for Vale, BHP, Kumba, and Mount Gibson. Except for BHP, all companies were disappointed due to provisional pricing impacts and mix changes.
Read our recent production preview Fortescue Metals Group (FMG AU): High Dividend Yield of 9%, What to Expect From Q4 FY24, to be declared on the 25th of July. 


Iron Ore Tracker July 22nd, 2024: Doing The Dance Between 95-130 USD/Ton, Use Iron Condors

<ul>
<li>Following the iron ore rally at the start of the month, prices have corrected sharply lower owing to downbeat economic data and an inventory buildup.</li>
<li>Option activity over the past week was notably skewed towards put options suggesting a negative sentiment. Weekly options volume was sharply lower WoW.</li>
<li>Recent bearish sentiment has been accompanied by a decline in IV. Outcome from the plenary meeting is likely to reignite volatility in the coming weeks.</li>
</ul>


Following the iron ore rally at the start of the month, prices have corrected sharply lower owing to downbeat economic data and an inventory buildup.
Option activity over the past week was notably skewed towards put options suggesting a negative sentiment. Weekly options volume was sharply lower WoW.
Recent bearish sentiment has been accompanied by a decline in IV. Outcome from the plenary meeting is likely to reignite volatility in the coming weeks.


[Iron Options Weekly 2024/28] Supply/Demand Outlook for Iron Ore Outweighs Stimulus Hopes

<ul>
<li>Anticipation of an extensive stimulus package at China’s Third Plenum, aimed at revitalizing the decelerating economy, is driving a rebound in iron ore prices.</li>
<li>China's iron ore imports have increased by 7% year-over-year despite a 3% decline in steel output, leading to a buildup in inventories on-shore. </li>
<li>The convergence of technical signals and seasonal trends in the SGX TSI Iron Ore Index suggests a bullish market stance, highlighting potential profit opportunities.</li>
</ul>


Anticipation of an extensive stimulus package at China’s Third Plenum, aimed at revitalizing the decelerating economy, is driving a rebound in iron ore prices.
China's iron ore imports have increased by 7% year-over-year despite a 3% decline in steel output, leading to a buildup in inventories on-shore. 
The convergence of technical signals and seasonal trends in the SGX TSI Iron Ore Index suggests a bullish market stance, highlighting potential profit opportunities.


Iron Ore Prices on Fire on Hopes of China’s Third Plenum

Global Commodities, Mint Finance

Srinidhi Raghavendra

Global Commodities

<ul>
<li>Chinese real estate investments fell 10.1% in the first five months of 2024 YoY. New home prices fell at the fastest pace in more than 9.5 years in May.</li>
<li>Fresh bank lending in China rebounded well expectations in May. Chinese banks issued 950B yuan (v/s 1.36T yuan issued last May) in new loans last month.</li>
<li>China's consumer inflation held flat in May amid feeble domestic demand, uneven economic recovery, and consumer confidence weakness.</li>
</ul>


Chinese real estate investments fell 10.1% in the first five months of 2024 YoY. New home prices fell at the fastest pace in more than 9.5 years in May.
Fresh bank lending in China rebounded well expectations in May. Chinese banks issued 950B yuan (v/s 1.36T yuan issued last May) in new loans last month.
China's consumer inflation held flat in May amid feeble domestic demand, uneven economic recovery, and consumer confidence weakness.


Persistent Weakness in Chinese Real Estate Will Drag Iron Ore Prices Down

Australia

Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4, 72.4% Fe), hematite (Fe2O3, 69.9% Fe), goethite (FeO(OH), 62.9% Fe), limonite (FeO(OH).n(H2O)) or siderite (FeCO3, 48.2% Fe).

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Iron Ore (IRON ORE COMDTY)

[Iron Options Weekly 2024/29] China’s Plenary Meeting and Rate Cut Fail to Enthuse Iron Ore Markets

China's recent economic measures failed to lift iron ore markets following disappointing 3rd plenary meeting. Despite a rate cut and increased...

Mint Finance

Iron Ore Tracker July 22nd, 2024: Doing The Dance Between 95-130 USD/Ton, Use Iron Condors

With iron ore continuing to remain rangebound between 95-130 USD/ton for the last 3 years (with minor overshoots), we summarize actionable ideas in...

Sameer Taneja

[Iron Options Weekly 2024/28] Supply/Demand Outlook for Iron Ore Outweighs Stimulus Hopes

Iron ore prices rallied in early July but moderated last week due to inventory buildup & downbeat economic data. Options activity slowed as...

Mint Finance

Iron Ore Prices on Fire on Hopes of China’s Third Plenum

China's anticipated stimulus package at the Third Plenum is boosting iron ore prices, despite a buildup in inventories and decline in steel...

Mint Finance

Persistent Weakness in Chinese Real Estate Will Drag Iron Ore Prices Down

Chinese home prices fell fastest in 9.5 years in May. Domestic loan issuances were well below lowered expectations. Inventory remains elevated....

Mint Finance

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Iron Options Weekly 2024/29] China’s Plenary Meeting and Rate Cut Fail to Enthuse Iron Ore Markets

China's recent economic measures failed to lift iron ore markets following disappointing 3rd plenary meeting. Despite a rate cut and increased...

Mint Finance

Iron Ore Tracker July 22nd, 2024: Doing The Dance Between 95-130 USD/Ton, Use Iron Condors

With iron ore continuing to remain rangebound between 95-130 USD/ton for the last 3 years (with minor overshoots), we summarize actionable ideas in...

Sameer Taneja

[Iron Options Weekly 2024/28] Supply/Demand Outlook for Iron Ore Outweighs Stimulus Hopes

Iron ore prices rallied in early July but moderated last week due to inventory buildup & downbeat economic data. Options activity slowed as...

Mint Finance

Iron Ore Prices on Fire on Hopes of China’s Third Plenum

​China's anticipated stimulus package at the Third Plenum is boosting iron ore prices, despite a buildup in inventories and decline in steel...

Mint Finance

Persistent Weakness in Chinese Real Estate Will Drag Iron Ore Prices Down

Chinese home prices fell fastest in 9.5 years in May. Domestic loan issuances were well below lowered expectations. Inventory remains elevated....

Mint Finance

China's anticipated stimulus package at the Third Plenum is boosting iron ore prices, despite a buildup in inventories and decline in steel...