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[weekly Review of SMM Black Futures] 20190 614: macro industrial data are not as expected, and the disk is running weakly.
Jun 16,2019 14:58CST
The content below was translated by Tencent automatically for reference.

In terms of volume and price: RB1910 closed down 37 yuan / ton to close at 3755 yuan / ton; HC1910 closed down 9 yuan / ton to 3628 yuan / ton; I1909 rose 2 yuan / ton to close at 783.5 yuan / ton; J1909 closed down 43 yuan / ton to close at 2108.5 yuan / ton. In terms of position data, RB1910 handled 970000 transactions, an increase of 4060 to 2.54 million; I1909, 1 million, with a decrease of 53900 to 1.84 million; in terms of capital flows, a net outflow of $412.15 million from RB1910 today; and a net outflow of $544 million from I1909.

Viewpoint: shock is weak. Today, when the real estate data were released in May, the most closely watched investment growth rate fell from 11.9% to 11.2%, the growth rate of commercial housing sales slowed from 8.1% to 6.1%, and the area growth rate of commercial housing sales slowed from-0.3% to-1.6%. At the same time, the financing environment for open merchants tightened again in May, and the growth rate of funds in place dropped from 8.9% to 7.6%. This data triggered concerns about weaker demand in the later period, the overall disk showed a volatile downward trend, while iron ore was supported by the continued decline in port stocks, the trend is relatively strong. Judging from this week's high-frequency data, rebar production increased by 41000 tons, or 1.1 percent, from the previous week, again from a decline to an increase. On the demand side, there are signs of weakness, with SMM data showing that weekly consumption of rebar fell by 421000 tons (- 10.6 per cent) this week compared with last week, a significant increase, and hot coil consumption fell by 73000 tons (- 2.1 per cent) compared with last week. In addition, from the national building materials trading volume indicators, the average daily trading volume this week fell 6000 tons compared with last week, down 3.2 per cent. With the advent of high temperature and rainy weather, steel demand has weakened significantly, and this trend may continue next week. There is also a phenomenon of accumulation at the end of the inventory, and there are some factors that are not conducive to the market either from the macro level or from the industry. And iron ore after reaching a new high, showing a high stagflation phenomenon, coke fundamentals have also weakened, inventory has increased, have suppressed the price, but at the same time, the recent frequent environmental protection actions, the market for the supply-side disturbance has a certain expectation, if the environmental protection efforts continue to increase, it may have a certain boost to the price, if not expected, the price shock weak operation probability is greater.

Strategy: RB1910 contract range (3700, 3850); I1909 contract range (680800), you can test short positions, set stop losses, pay attention to environmental policy news, if the intensity is increased, the empty list will be reduced or leave the market to wait and see.

Disclaimer: this information comes from a statistical arbitrage model based on historical data, and all conclusions are based on reliable and publicly available information. The SMM quantification team is not responsible for any losses that may be caused by all information. We recommend that investors independently evaluate specific investments and strategies. Investors are also encouraged to seek advice from professional financial advisers. This information does not provide a tailored investment strategy.

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