Take it easy to be overly bearish and be careful to sail the ship for thousands of years.

Current Daily Review (10 October)

< 1 > on the spot side.

The price of steel market is stable as a whole: it is mixed between ups and downs.

Trading volume: general.

The billet in Tangshan area is stable to 3380 yuan / ton.

Market mentality: stable.

< 2 > in terms of futures.

RB2001 main contract:

Intra-day huge increase and decrease of positions, tail positions to 36834 hands, within the day between 3385 and 3430 between strong shocks, the end of 3415. The main organization has a daily clearance of 28437 hands.

HC2001 main contract:

Intra-day significant increase and decrease of positions, tail positions to 13814 hands, the day between 3380 and 3445 weak shock, the end of 3399. The main organization has a daily clearance of 11088 hands.

Iron ore l2001 main contract:

Intraday huge reduction of positions, tail positions to 158874 hands, during the day between 633.5 to 659 bottom rebound, the end of 657.5. The main organization has a net increase of 51411 hands per day.

Leprechaun J2001 main contract:

Within the day significantly increased Cheng Cang, tail reduced to 27428 hands, within the day between 1835 and 1866 between strong shocks, tail 1858. The main organization has a net increase of 3441 hands per day.

Coking coal JM2001 main contract:

Within the day significantly increased or reduced positions, tail positions to 20088 hands, within the day between 1243.5 to 1256 finishing, the end of 1253.5. The main organization within the day clearance single 466 hands.

< 3 > current forecast for tomorrow

1. Spot: steady and strong.

two。 Futures:

RB2001 main contract: concussion between 3380 and 3470.

HC2001 main contract: concussion between 3370 and 3450.

Iron ore L2001 main contract: concussion between 640 and 670.

Demon coke J2001 main contract: concussion between 1830 and 1900.

Coking coal JM2001 main contract: concussion between 1230 and 1280.

< 4 > current operation suggestion: unchanged.

1. Spot aspect: reduce inventory as the main theme, but do not brake down; short spot still need to wait.

two。 In terms of steel:

RB2001/HC2001 main force contract: the trend is empty and high gradually intervene.

Iron ore L2001 contract: more trading in the range.

Coke J2001 main contract: more trading in the range (effectively below 1800 stop loss).

Coking coal JM2001 main contract: mainly trading in the range (effectively falling below 1200 stop loss).

< 5 > Heart language and information.

1. Sunrise interpretation of inventory data.

The total inventory of the five major varieties decreased by 280100 tons to 16.53 million tons, an increase of 1.08 million tons over the same period last year.

The overall interpretation is neutral.

RB production increased by 289700 tons to 3.427 million tons, compared with 3.368 million tons in the same period last year.

The social treasury fell by 169400 tons to 4.828 million tons, an increase of 432800 tons over the same period last year.

The factory and warehouse decreased by 40700 tons to 2.521 million tons;

The total inventory was 7.35 million tons, an increase of 990000 tons over the same period last year.

Overall neutral is slightly better!

The social bank of hot rolling dropped slightly by 2800 tons to 2.538 million tons, the factory warehouse decreased by 38100 tons to 942400 tons, and the total inventory was 3.48 million tons, an increase of 80, 000 tons over the same period last year.

Hot rolling production increased by 134000 tons to 3.24 million tons, a decrease of 182000 tons from 3.424 million tons in the same period last year.

Overall neutral preference.

Today's inventory data are in line with the author's expectations, exceeding market expectations. The return of demand is an objective fact!

two。 Tangshan area stopped soothing Hong Kong for a day.

3. Linfen area launched a yellow warning of heavy pollution, see SMM Nonferrous Network report for details.

4. Tangshan area in October air pollution prevention and control plan for details see SMM Nonferrous Network report, will not repeat!

5. Raw material end.

Scrap, coke spot stability; Tangshan, Luliang, Henan individual coke enterprises increased by 100 yuan / ton, steel mills do not speak for the time being!

Iron ore spot rebound 10 yuan to 750 yuan (PB powder), disk sticking 158.

6. The end of the material.

At present, the overall market demand is better, individual regional specifications are uneven, such as East China and Shanghai, rush demand should continue until November should be no Qiang; northern Xinjiang production restriction data reflected in the next Thursday is a high probability event! The driver of a short-lived rebound in mid-October remains. Of course, the trend to see the empty claws are not worth mentioning, the key is the rhythm! The author's point of view remains unchanged: spot selling has not been sometimes! Phase steel empty, high gradually empty is the best policy; multi-material empty material is a good option.

7. Pay attention to the process of Sino-US negotiations.

With Tuesday, Sanxin language and information.

1. Lumber end aspect

1.1. Tangshan area production restrictions again strict demand (September 9-12) see SMM Nonferrous Network report, seemingly short-term disturbance, the essence is not entirely; blast furnace once again interrupted, not only boost costs, while supply incremental expected Yao fold, supply side reduction continues and will be reflected in the inventory in the next 1.2 weeks.

1.2.demand is still expected in October! The author prospectively predicts that the return period of demand in September and October will be realized gradually.

1.3. Inventory pressure is not much: the total inventory of the five major varieties before the festival is 1.07 million tons higher than the same period last year, and RB is 970000 tons higher. Inventory data are expected to sunrise on Thursday, not much higher than last year! Considering the phased impact of Tangshan area, it is still possible to reduce the reservoir next Thursday. The boundary time inventory data is similar to the same period last year, but the same period last year is the high price is extremely cold!

In short, the driving force of the rebound in mid-October is still there, and the steel is still chasing the air, and it is necessary to wait for the spot to be shorted.

two。 Scrap price is high, electric arc furnace gross profit again convergence or loss area again go expansion, production capacity expansion sustainable what to worry about!

3. Iron ore supply has no essential change, high demand remains unchanged (the cost of traditional blast furnace hot metal is much higher than the cost of scrap steel)! Where does the logic of the plunge come from? The original sin is a financial disturbance. This spot down 10 yuan, PB powder ore 740 yuan, disk sticking 166.

4. Coke aspect: Coke enterprise inventory no pressure, spot stability in the strong, steel mills to replenish inventory willingness to enhance.

5. Focus on the sunrise of inventory data tonight.

6. Germany is worried that the global purchasing managers' index for manufacturing fell in September.

With Tuesday's heart language and information.

1. The estimated value of inventory data is in doubt: the sharp decline in output and the sharp increase in factory and warehouse is not in line with common sense, is it a routine? Wait for Wednesday and Thursday to land.

2. The spot price in October is generally in a period of shock, and there is a high margin of safety in the early and middle of November. The main contract of steel RB2001 is difficult to do up and down, and the large probability is mainly in the range of 3370 to 3600.

3. The return period of the demand in the south continued to the end of the month without Qiang, and the northern wood set sail one after another in the middle and late ten days of the south.

4. Steel plant capacity expansion and then from the step, seasonal demand convergence gradually approaching! Trend bearish logic is known, there is no need to repeat! The difficulty lies in rhythm.

5. The intensity of environmental protection and production restriction in autumn and winter this year is stronger than that of the same period last year!

6. The price of scrap steel is easy to rise but difficult to fall and gradually cash in. No, no.

7. Arc furnace steel gross profit review, stage production capacity once again to expand beyond doubt. However, the persistence of doubt, the original crime is still limited scrap resources, this Shagang increased by 100 yuan / ton.

8. The long process needs the process one after another to resume production, does not need the red rain to wash the fragrant gills, the market still has the mismatch namely the return light opportunity!

9. Iron ore price trend the author expects, first rise and then fall and then rise rhythm.

10. Coke short rhythm: easy to rise but not fall.

11. Focus on inventory data correction values.

< 6 > Rhythm, trend analysis and point of view remain unchanged. For details, see Weekly Review (27 September).

Details consultant Lu Qingping 021-51595781

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