Current Review (30 May)

< 1 > spot aspect. Today, steel market prices continue to be weak, falling the same as yesterday, down about 30%; East China region Shanghai three brands (without E) fell below 3800 to 3790, a total drop of 250 yuan / ton in May, the life of the first brand hanging 4000. Trading volume: weak. Tangshan area billet prices up 10 yuan to 3600 yuan / ton. Market mentality: pessimistic.

Phase II steel. Stock market, commodity green dress. The black system overall fatigue state is all obvious: the iron ore resistance drops; the coke "sister" slender step, demon toil and invalid; finished end RB green, HC light green.

RB1910 main contract:

During the day, a huge increase in positions, tail positions to 86492 hands, in the day between 3835 and 3773 concussion fell, 3800 integer barrier breakdown, closing 3777. The main organization within the day clearance single 18856 hands.

HC1910 main contract:

During the day, there was a slight increase in positions and tail positions to 25728 hands, with a weak shock between 3689 and 3630 during the day, with a final closing of 3640. The main organization within the day clearance single 3770 hands.

Iron ore l1909 main contract:

Another attack on the 730 gate failed, the Central Plains competition is in progress.

During the day, a small reduction in positions, the end of the increase to 2338 hands, in the day between 750,730and 730s between the shock fell, the end of the 737s. The main organization has a net increase of 14302 hands per day.

Demon Jiao J1909 main contract:

During the day, the number of positions increased significantly to 34160, and continued to look back between 2249 and 2199.5 during the day, with a final receipt of 2205. The main organization within the day clearance single 1242 hands.

Coking coal JM1909 main contract:

During the day, there was a substantial increase in positions and tail positions to 39694 hands, with a strong concussion between 1386.5 and 1414.5 and a close of 1396.5. The main organization within the day clearance single 3150 hands.

Forecast for tomorrow.

1. Spot: weakness continues.

2. Futures:

RB1910 main contract: between 3750 and 3850 concussion.

HC1910 main contract: between 3600 and 3710 concussion.

Iron ore l1909 main contract: between 713 and 760 concussion.

Demon Jiao J1909 main contract: between 2180 and 2260 concussion.

Coking coal JM1909 main contract: between 1370 and 1410 concussion.

< 4 > suggestions for current operation.

1. Spot: same as yesterday.

Regional differences determine operational differences. That is to say, the decline falls in the area of the author's forward-looking range of 300 + 30, and gradually enters the stage where the input is greater than the replenishment of inventory. In the area with less decline, if the inventory pressure is large, the inventory will continue to drop, and the rolling operation of the non-pressure will be dominant.

2. Futures:

RB1910 contract: the interval is mainly empty near the upper edge value.

HC1910 contract: the interval is dominated by cloth near the lower value.

Empty RB1910 contract multi-HC1910 contract arbitrage holding.

Iron ore L1909 contract: between 713 and 760 low, high altitude operation is appropriate.

Coke J1909 contract: low and high altitude operation in the range of 2180 to 2260.

Coking coal JM1909 contract: the implementation of the author's proposal to leave the market at a low level, the principle of wait-and-see, tasteless food.

< 5 > Heart language and information.

1. Sunrise interpretation of inventory data (see SMM Limited Network for details). On Friday, the decline of major varieties converged sharply to 140000 tons, just one step from the inflection point; the RB social warehouse fell by 170000 tons, the factory warehouse increased by 70, 000 tons, and the output looked back to minus 0.33 tons; the HC social reservoir increased by 30, 000 tons, and the factory warehouse increased by 20, 000 tons. The above data show that: high demand is not in, convergence and supply side temperature and expansion further verification, the overall interpretation of cautious pessimism; HC inventory inflection point: many looking for him thousands of degrees, suddenly look back, inflection point Iraq is in, dim lights. It came as expected. The inflection point of RB follows suit, with a good chance of landing next week.

2. Delivered by the Ministry of Commerce.

Whether progress can be made in the Sino-US trade negotiations depends to a large extent on the attitude and sincerity of the US side.

3. The decline in local areas is close to the range of 300 + 30 in the author's forward-looking forecast. Such as East China Shanghai region: operation recommendations, smooth operation is appropriate, do not stop falling; inventory without pressure gradually into the larger than replenishment inventory stage. In other areas, wait for inventory opportunities to be replenished.

4. Demon coke.

Coke: Shanxi Province environmental protection production limit documents are still hanging and not falling. Although some coke enterprises opened the fourth round of 100 yuan / ton, the steel enterprises are not surprised. Short-term supply is still high, the author predicts that the fourth round of price rise in July will be able to fall to the ground. It is appropriate to intervene gradually in the right amount of coke.

5. Iron ore: high demand, high discount, supply-side substantial convergence logic is still there, although the trend of the author remains the same, but in June with the end of the large probability weakened, did not look back, all the way to run difficult to continue is also a high probability event. Therefore, the trading ability is strong, every high air test is a good option; no trading ability, slow to wait for more opportunities after the switch. Don't worry about gain or loss.

6. Phase steel RB is still interpretation of iron ore, coke boost cost on the price support of the false proposition, the current conditional steel enterprises do their best to aim at RB capacity expansion. Of course, for products with long and only long processes, the proposition of strong cost support is valid. Therefore, the author continues to maintain the original judgment: if the output of arc furnace does not look back, any reverse pumping is not sustainable; only blame RB has "second mother" electric arc furnace.

7. The high price of steel before and after the low price in June is a high probability event. At that time, see the logic deduction of the author's comments this week.

The trend analysis and viewpoint remain unchanged. See the weekly review for details (25 May).

Details consultant Lu Qingping 021 51595781

(statement: this article is made and published exclusively by SMM Steel under the exclusive license of the author, and may not be reproduced without authorization)