Part A: Review (2018/11/12-2018/11/16)

From November 12, 2018 to November 16, 2018:the closing price of iron ore futures I1901 contract on Friday was 521 yuan, 4 yuan lower than the closing price of the last trading day of last week. The highest price for this week is 526.5 yuan/ton, and the lowest point is 505.5 yuan/ton.

This week (2018/11/12-2018/11/16), the total volume of I1901 contract was 5,191,812 lots, a decrease of 63,094 lots from last week. After the close of trading this Friday, open interest was 635,718 lots, a decrease of 110,908 lots from the last trading day of last week.

Part B: Market Dynamics

1. Capacity utilization rate

This week(2018/11/12-2018/11/16), Mysteel surveyed 247 steel mills with a blast

furnace operating rate of 78.4%, down 0.7% from the previous week and down 2.9% year-on-year; blast furnace ironmaking capacity utilization rate was 80.5%, down 0.25% from the previous week and down 1.98% from the previous year; Steel mill profit rate is 91.09%,down 0.81% from the previous week; the daily average molten iron output was 2,251,100 tons, a decrease of 7,000 tons from the previous week and an increase of 55,500 tons year-on-year.

2. National Bureau of Statistics of China

The data released by the National Bureau of Statistics of China on Wednesday shows:

(1) pig iron

China's pig iron production in October was 67.74 million tons, an increase of 7.3%

over the same period last year;

China's pig iron production from January to October was 645.06 million tons, an

increase of 1.7% year-on-year.

(2) crude steel

China's crude steel output in October was 82.55 million tons, an increase of 9.1% over the same period of the previous year;

China's crude steel output from January to October was 782.46 million tons, an increase of 6.4% year-on-year.

(3) Steel

China's October steel output was 98.02 million tons, an increase of 11.5% over the same period last year;

China's steel output from January to October was 918.44 million tons, an increase of 7.8% year-on-year.

3. CSRC

On November 12, 2018, the China Securities Regulatory Commission and the

Monetary Authority of Singapore signed the Memorandum of Understanding on Futures Regulatory Cooperation and Information Exchange.

Part C: Transaction Summary

Since March 26 and up to November 16 closing, China iron ore futures’ cumulative trading volumes is 306.93 million lots and the cumulative amount of transaction is 14.58 trillion yuan.

Average daily turnover of 1,930,387 lots (2018/3/26-2018/11/16). Open interest declined steadily, with 2,224,492 lots on March 26th and 1,082,052 lots after the closing of November 16.

Because DCE raised the delivery quality standards for iron ore futures at the end of 2017, the volume and open interest of iron ore futures showed a downward trend.

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