Current weekly review (evening of 14 June)
Play back the current market this week.
1. The main logic of the multi-empty game this week includes, but is not limited to.
(1) the negative impact of the trade war between China and the United States has failed.
(2) the domestic stock market bottomed out and rebounded.
(3) the release of macroeconomic data is generally weak and stable.
(4) seasonal demand convergence superimposed inventory inflection point return period.
(5) the high yield of RB is difficult to continue.
(6) High demand for iron ore, high discount and substantial convergence on the supply side are still on the way.
(7) the fourth round of coke lifting game is in progress.
(8) the product cost support with and only long process is further strengthened.
(9) the speed increase of anti-periodic factor adjustment is on the way.
two。 Spot: this week the steel market price decline convergence is obvious, the overall weak stability. Specific: RB fell by an average of 30 yuan per ton, and HC fell by an average of 20 yuan per ton, both of which were converging from last week. The price of billet in Tangshan area is stable, with a weekly income of 3510 yuan / ton (3510 yuan / ton last week).
In short, the characteristics of the road to the bottom appear.
Market mentality: pessimistic, cautious, positive coexistence.
3. Futures: overall wide concussion.
During the week, there was a wide range of strong fluctuations between 3680 and 3844, with a weekly closing of 3755 (3737 last week).
During the week, there was a wide range of strong fluctuations between 3529 and 3679, with a weekly closing of 3628 (3597 last week).
Iron ore l1909 contract:
It rebounded strongly between 708.5 and 797.5 in the week, closing at 783.5 (712.5 last week).
Demon Jiao J1909 contract:
During the week, the width was weak between 2213 and 2105, closing 2108.5 per week (2146.5 last week).
Coking coal JM1909 contract:
Within the week, it fluctuated in a narrow range between 1438.5 and 1384.5, closing at 1386 per week (1388.5 last week).
In short, the weak period is strong, the reason is high discount.
Next week's current forecast.
1. Spot aspect: the front low after the high probability!
RB1910 contract: between 3710 and 3860.
HC1910 contract: between 3580 and 3730.
Iron ore contract l1909: between 760 and 830.
Demon Jiao J1909 contract: between 2100 and 2200 concussion.
Coking coal JM1909 contract: between 1350 and 1430.
< 3 > suggestions for current operation.
1. Spot aspect: enter more than replenish inventory stage in an all-round way.
two。 Futures: basically the same as last week.
The end of timber: in the interval, the empty orders gradually meet the trend of closing positions and leaving the market. (pay attention to the most sad position of RB1910 contract 3560, you can get involved in heavy positions).
The short RB1910 contract multi-HC1910 arbitrage warehouse receipt continues to be held, and the base difference of the target contract returns to zero.
Iron ore i1909 contract: the trend is still on the way, the goal can be imagined (I don't know). Once again, it is too late to intervene in the vicinity of the value!
Coke: short rhythm and high probability of concussion between 2100 and 2200.
Coking coal: wait-and-see or near the value of light warehouse empty operation is appropriate (low capital efficiency).
< 4 > Information and heart language.
1. The National Bureau of Statistics transmits:
In May 2019, China's crude steel output was 89.09 million tons, an increase of 10.0 percent over the same period last year to 404.88 million tons in May, an increase of 10.2 percent over the same period last year. In May, China's steel output was 107.4 million tons, an increase of 11.5 percent from January to May, an increase of 11.2 percent over the same period last year.
From January to May, China's fixed asset investment totaled 21.7555 trillion yuan, an increase of 5.6 percent over the same period last year, and the growth rate slowed down 0.5Pb. The area of new real estate construction increased by 10.5, and the growth rate slowed down by 2.6Pb.
two。 Iron ore stocks at 45 ports across the country fell for a further tenth week this week, by 3.63 million tons to 117.96 million tons. Spot sales are generally cherished, the import price of minerals approaching US $110, port PB powder 815 yuan / ton, some as high as 860 yuan / ton to 880 yuan / ton. In terms of 815, the stage mine discount is 102.
3. The Ministry of Ecological Environment interviewed Hebei, Henan, Shanxi and other places on the comprehensive control of air pollution in autumn and winter from 2018 to 2019, and set out again with limited production in Tangshan. Footnotes to the 70th anniversary of the National Day.
The author predicts that the next limited production thunderstorm peer big probability!
4. The central bank released 300 billion liquidity again, and the regulation of counter-cyclical factors is on the way.
5. Four dimensions to verify the market price inflection point?!
5.1. From the perspective of time dimension:
Since the author forward-looking research at the end of April, the rebound ended to start the journey of decline (the author's point of view: the resistance fell in May, the first and middle of June is smoother than May; the time dimension is 45 days, the spatial dimension is 300 + 30. It has been 45 days since then. Therefore, from the perspective of time, it has been the end of the force.
5.2. Spatial dimension: in addition to a few areas, most of the areas have landed (300 ±30 yuan / ton).
Therefore, the steel price to build the bottom of the road has become, tamping the bottom is a high probability event!
5.3. From a cost point of view:
At present, the cost of hot metal is basically the same as that of scrap steel. The average profit of long-process RB is 300yuan / ton, the part of short-process electric arc furnace has lost money, and most of them maintain small profit. Regardless of the long process, as long as the arc furnace capacity review is sufficient to change the relationship between supply and demand. As a result, the space for inertia to fall is very limited.
5.4. Understanding of the inflection point of inventory.
This week thread inventory inflection point return period, mainly due to public wailing and life test, resulting in short-paced demand convergence. Don't use chicken feathers as sharp arrows. The author tends to repeat it. The main logic remains the same: infrastructure is running wild on the road superimposed on the resilience of property demand. What's more, the total inventory is still at a relatively low level.
In short, the author's point of view: the probability of decline stops in mid-June, late June or early July to start the rebound journey; the temporal and spatial dimension is tentatively 500 + 30, 75 to 90 days. Phase steel target position 4050 + 50, iron ore target location is unknown, can be telex SMM non-ferrous network.
Note: in the field of full-dimensional argumentation, see the monthly review at the end of June.
Attached: < May > the operation of the steel market in June is prospected (refined).
1. A brief analysis of the policy of environmental protection and production restriction.
The author believes that the policy of environmental protection and production restriction should take into account environmental protection and stable economy, and the supply-side reform of the iron and steel industry should not only ensure success (long process steel enterprises are not losing is the bottom line) but also not hurt other manufacturing industries (high-voltage lines, excessive flying).
As a result, despite the easing of production restrictions in Tangshan this weekend, there is a good chance that the economy will start smoothly. However, the author judges that unsustainability is a high probability. The logic is as follows: first, it is not intended to help the high demand for iron ore, is the war of the country. Second, it is subject to the national policy of "green mountains and green waters". Third, the success or failure of supply-side reform in the iron and steel industry is related to the major issues of right and wrong, and there is no room for excessive willfulness of the power of the local government.
In short, the degree is the highest wisdom, short do not excessive delusion!
two。 How much do you know from the time and space dimension of steel price decline from the capacity, cost and profit of electric arc furnace?
In the cycle of trend decline, the author once said: the decline of steel price needs to pass through the gross profit of arc furnace steel and superimposed inertia decline in order to reverse the capacity contraction of electric arc furnace.
At present, the average profit of electric arc furnace is still 100 yuan / ton, and the downward space is at least 100 yuan / ton. Common sense is not justified! From the point of view of long-term process costs, the high demand for iron ore fundamentals continues to maintain or even further expand, and it is not alarmist to set a new high after looking back on the price, and the cost approaches the cost of electric arc furnace; let it go on, the movement power of iron ore and scrap holes is greatly enhanced, so as to promote the scrap price to continue to move forward after looking back is a high probability event. Therefore, spot prices fall, scrap prices rise two-way compression RB "second mother" electric arc furnace profits and forced its capacity to shrink, thus greatly shortening the dimension of time and space.
In short, this round of trend decline from the empty dimension are not far, limited! The author expects that the stopping of the decline in the transition period in the first and middle of June is a high probability event.
3. Demand side.
Despite the absence of high demand, demand remains resilient. It is not difficult to prove the resilience of demand: there is no doubt that infrastructure is on the road; demand for real estate is enough to look at the 13.1 per cent growth rate of new construction in April.
4. On the raw material side.
The original judgment on iron ore is maintained:
From a fundamental point of view, high demand, high discount superimposed supply-side convergence is still maintained, the only uncertainty is the policy disturbance. The author analyzes that the effective intervention tools of policy are limited, and the most direct and effective way is to open the hammer of environmental protection to limit production, but it is also limited by the current situation of macroeconomic operation.
From the basic point of view, coke enterprise inventory is not under pressure, the reason why the author predicted the fourth round of price rise is dead, mainly based on the steel price profit contraction superimposed "bully soft (coke) afraid of hard (iron ore)" judgment! Prediction: the fourth round of price increases are likely to fall to the ground from late June to July.
5. Inventory inflection point knowledge.
This week HC inventory inflection point arrived as scheduled, RB inflection point is still holding the pipa half covered with shy face. The arrival of the inflection point is not the only footnote for another sharp fall. First, market prices have been expected in advance, and second, it depends on the equivalent ratio, which this year has an obvious advantage over the same period last year (see the above detailed deduction this week for details).
6.RB cost strong support is a false proposition has been gradually verified; there are only and only high and long process products, strong cost support is still effective. Don't confuse the public!
7. Steel RB1910 contract, if the gap is unfortunately out of reach, happy to see its success; the author tends to, gap compensation is a small probability event! Take it easy on the bears.
8. In early June, "Heaven wailed qu Yuan and the examination of life" caused a strong convergence of short-term demand, do not use chicken feathers as a sharp arrow! It's not the essence.
In short, a summary of the analysis, and give the author's point of view: before June low after high, the decline stopped in the first ten days to the middle of the transition period, late start the rebound journey is a high probability event!
The trend analysis and viewpoint remain unchanged.
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)