Current Weekly Review (25 October)
< 1 > the current market is back this week.
1. The main logic of this week's long-space game includes, but is not limited to. The main results are as follows: (1) the global macro-economy is weak. (2) the bottom of global monetary easing continues. (3) the trade friction between China and the United States has been further eased. (4) Brexit has twists and turns. (5) the real estate data is not as pessimistic as the market expectation. (6) High frequency worry about environmental protection and production restriction in Tangshan area. (7) de-storage is still on the way: the decline of the five varieties is still OK, the yield of RB is looking back, and the output of hot rolling is looking back. (8) the demand is entangled and there is no pressure on the social base. (9) HX steel factory lives 7 people, WISCO "fire" high red steel, security inspection arrow on the string. (10) scrap prices look back before looking forward. (11) the demand for stone is high and there is no Qiang, and the bottom position of sintered powder in steel plant. (12) imports of billets and rough forgings have "surged" and chicken feathers are used as sharp arrows. (13) Coke spot is expected to fall by two rounds. (14) the mood of steel funds in the period is greater than the marginal improvement of fundamentals.
(15) the convergence of seasonal demand is difficult to move.
two。 Spot: this week's steel market prices overall resistance downward.
Tangshan billet price: first suppression and then rise, weekly revenue of 3360 yuan / ton (3350 last week).
Market mentality: pessimistic, cautious switching.
3. Futures: the price falls by a certain extent, but after that, it will be disastrous.
RB2001 main contract:
It fluctuated between 3276 and 3351 during the week, closing at 3345 per week (3310 last week).
HC2001 main contract:
It fluctuated between 3280 and 3366 during the week, closing at 3360 per week (3300 last week).
Iron ore l2001 main contract:
It fluctuated between 604 and 635 during the week, closing at 634.5 per week (up from 616 last week).
Leprechaun J2001 main contract:
It rebounded between 1732 and 1798 during the week, closing at 1793.5 (1779 last week).
Coking coal JM2001 main contract:
It fluctuated between 1230.5 and 1265 during the week, closing at 1257.5 per week (1239.5 last week).
< 2 > current forecast for next week.
1. Spot aspect: shock upward, but the space is limited.
RB2001 main contract:
Between 3300 and 3420 during the week.
HC2001 main contract:
Between 3320 and 3430 during the week.
Iron ore l2001 contract:
Between 610 and 660 during the week.
Between 1750 and 1830 during the week.
Coking coal JM2001 contract:
Between 1230 and 1280 during the week.
< 3 > current operation suggestions.
1. Spot aspect: reduce the main theme of inventory, short spot suspension.
RB2001/HC2001 main contract: the implementation of the author's forward-looking proponents (the previous high empty single bargain gradually stop the profit and departure field); the short rhythm is more and more short, fast in and out; the trend empty single high gradually intervene.
Iron ore L2001 main contract: more trading in the range (multiple single effective breakdown 610 stop loss, empty single effective breakthrough 660 stop loss).
Demon coke J2001 main contract: the interval shock trading is dominant, the lower value near the single, the upper value near the empty single (multiple single effective breakdown 1730 stop loss, empty single effective break through 1860 stop loss).
Coking coal JM2001 main contract: wait-and-see or interval shock trading mainly (multiple single effective breakdown 1200 stop loss, empty single effective break through 1300 stop loss).
< IV > Heart language and information. 1. Pay attention to the casualties of Hebei HX Steel Plant, the intensity of security inspection and production restriction; the marginal contribution is beyond doubt. two。 Early macro and fundamental marginal improvements have not been achieved, that is, less than expected pessimistic uncorrected. The original sin is the suppression of financial sentiment, which is likely to be fulfilled next week, but the bulls are not too infatuated, it is only a matter of rhythm, and the general direction is that the short pattern is difficult to move. 3. The contraction of electric arc furnace capacity is not sustainable. The operating rate and output utilization rate of electric arc furnace decreased slightly this week, mainly due to scrap price and resource disturbance, and the probability of deposit capacity expansion again with the convergence of loss per ton of steel and the arrival of scrap at the bottom price. 4. The subjective capacity expansion of long-process steel enterprises is objectively subject to the game of security inspection and environmental protection. No, no, no. The main logic: profits are still high, there is no doubt about the impulse to expand, and the will to govern for the people and the country should not be blasphemed. 5. Inventory is still on its way. The probability of Q4GDP customs clearance is high, the real heel of local infrastructure construction is aggravated, and the phenomenon of catching up with construction in the south is still expected, to a certain extent, the north wood is heading south, not to mention the short rhythm north wood going south is not as expected; the Spring Festival this year is about 20 days earlier than last year, paying attention to the cumulative inflection point of the total inventory at that time is the right way. 6. Raw material end. Scrap price short rhythm up and down space is limited: whether the high profit of the main logic long process covers the cost difference between traditional blast furnace and scrap and the comprehensive disturbance of general deficit of electric arc furnace steel enterprises. Iron ore. High demand is still no Qiang, steel mill inventory low, short rhythm concentrated inventory arrow; supply side direction disturbance is small. The driving force of the rebound is still there. Coke aspect: the original market is expected to fall two rounds is too sad, coke gross profit wailing superimposed environmental protection production restrictions double-edged sword. But the upstream space is also limited, the main logic: steel mills "bully soft afraid of hard" thinking inertia can not be urged. In short, the marginal improvement of short rhythm correction is a high probability event.
Enclosed are the words of Zhou Xin.
1. Steel price falling trend time and space dimension to verify. 1.1 demand side. Although demand in the south continues normally until the end of December, and even rush to work, it is generally difficult to stop the convergence of seasonal demand. Demand will return to normal next year after March. That means normal weak demand lasts 150 days. 1.2 supply side. Electric arc furnace steel mills, at present, only a small number of steel enterprises have a small gross profit, mainly due to tax rebate (4.5%) contribution; most steel enterprises generally lose about 150 / ton. Falling prices are forced to stop and cut production is the only option, and is expected to maintain normal capacity of 30 per cent. According to the rough estimate of the annualized production capacity of 175 million tons, the annualized reduction is more than 120 million tons, and the monthly reduction is 12 million tons. In the case of long-process steel mills, the current gross profit is calculated at an average of 350yuan / ton, 2150 of the cost of static blast furnace hot metal does not include tax, and 2660 of the cost of scrap steel does not include tax; the cost difference between scrap steel and traditional blast furnace is 510yuan / ton, which can not cover its gross profit and three expenses. Dynamically, the driving force of the next decline in scrap prices is weaker than that of steel prices. Therefore, reducing the proportion of scrap is a priority option. According to the author's research, at present, the proportion of waste is about 20%. If the proportion of waste is reduced by 5%, the annual production will be reduced by 50 million tons (the annual production capacity will be calculated by 1 billion tons). Monthly hidden production reduction of 5 million tons. 1.3. Excluding the factors of environmental protection and production restriction, it is an extravagant hope for the author to take the initiative to reduce the production of long-process steel enterprises! Not to mention the cost of forcing capacity contraction, crazy dream. Normal production capacity is determined. 1.4. The price of winter storage is normal about 3350, the logic is no longer repeated, see the daily review for details. 1.5 the total amount of accumulation in this round is less likely than that in the same period last year. First, thanks to the steel trade rebound has been falling inventory, the current social inventory no pressure. Second, most of the subjective will not winter storage, so as to increase the factory inventory pressure, the factory warehouse increased to the steel mill bearers, passive stop and reduce production is inevitable. In short, the author's point of view: this round of decline just set sail, spot target position, range 500 ±50; steel RB2001 contract target position: 3180 ±50. two。 Do not recommend spot winter storage, strongly recommended: virtual winter storage, mostly bargain gradually involved in the RB2005 contract. Main logic: next year real estate demand is still entangled (flat downward), infrastructure to make up for the short board is still on the road, scrap resources are still tightly balanced, economic downward pressure to increase reverse cyclical factor adjustment to accelerate. 3. Short-paced steel is still pumping drivers: macro factors do not boost, real estate data sunrise is not as pessimistic as expected, falling speed is too fast, demand toughness still exists, the number of deliveries is subject to (an institution has 1 million tons of spot resources delivery? ) wait. In short, the pursuit of empty point, every rebound empty single intervention is the best policy.
< 5 > trend analysis and point of view remain unchanged.
Details consultant Lu Qingping 021-51595781 (statement: this article is exclusively authorized by the author SMM Iron and Steel exclusive production and distribution, unauthorized can not be reproduced)