M UpdateGlobal Basic Materials | GlobalIron Ore Chartbook – January 2024Morgan Stanley & Co. LLCCarlos De AlbaEquity Analyst Carlos.De.Alba@morganstanley.com +1 212 761-4927 Morgan Stanley C.T.V.M. S.A.+Henrique BragaResearch Associate Henrique.Braga@morganstanley.com +55 11 3048-6198 Latin America Metals & MiningLatin AmericaIndustry ViewNo RatingMetals & MiningEuropeIndustry ViewAttractiveMetals & MiningNorth AmericaIndustry ViewIn-Line Recent Metals & Mining Reports Usiminas: 4Q23 EBITDA Beat; Cash from Ops Well Above Consensus and MSe (9 Feb 2024) Brazil Steel: Steel Import Tariffs Hike for Longs; Flats Remain Unchanged (9 Feb 2024) Steel: Steel Imports Monitor (8 Feb 2024) Nexa Resources SA: Updating Estimates (8 Feb 2024) Benchmark iron ore price increased 2.8% Y/Y, but decreased 7.3% M/M to $129.0/t as of February 9, 2024. The 1% iron ore premium of $2.10/t was up 2.4% Y/Y, but decreased 8.7% M/M. The 65% Fe price trades at a premium of 10.2% vs. the 62% Fe benchmark, while the 58% Fe price trades at a discount of 10.2%.Global steel production totaled 135.7Mt in December, down 5.3% Y/Y and 6.4% M/M. Chinese output decreased 14.9% Y/Y and 11.4% M/M to 67.4Mt. Production in the European Union was up 2.7% Y/Y to 9.1Mt. South Korea output amounted to 5.4Mt, up 2.7% Y/Y. Japan production increased 1.1% Y/Y to 7.0Mt. Brazilian production amounted to 2.5Mt, up 0.9% Y/Y.China's iron ore port inventories increased 4.2% M/M, but decreased 4.2% Y/Y to 132Mt on February 8th. This level represents 42 days of consumption, 8 days above the historical average. Chinese steel mills' iron ore inventories as of February 7th stood at 21.8Kt for domestic ore, which represents an increase of 61.6% M/M and 18.4% Y/Y. Inventories of imported iron ore amounted to 246.4Kt, up 30.3% M/M and 42.1% Y/Y, representing 29 days of consumption, 3 days above historical average.Iron ore output at a sample of 186 Chinese miners decreased 1.7% M/M, but increased 12.7% Y/Y to 484Ktpd, according to a survey conducted on February 9th. Utilization rate of 62.0% was below the historical average of 63.2%.Freight cost on February 9th from Brazil to China of $23.5/t was above the 2023 average freight price of $21.0/t, but below the 2002–24 average of $24.3/t. Australia to China freight cost of $9.2/t was above the 2023 average freight price of $8.7/t, but below the 2002–24 average of $10.3/t.Brazilian iron ore exports totaled 25.0Mt in January, up 1.1% Y/Y, but down 37.1% M/M. According to MDIC data, weekly iron ore shipments from Brazil in January ranged between 4.5Mt and 6.7Mt vs. 2024 YTD weekly average of 5.9Mt.Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investo...
