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[SMM Black current Daily Review] Weicheng is facing the rain and light dust, and the guest house is green and willow.
Apr 2,2020 19:48CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(2 April)

< 1 > in terms of epidemic situation.

The new situation of domestic epidemic situation: 841 cumulative cases were imported and 1075 asymptomatic infection.

Zhong Nanshan expects an inflection point in the global epidemic by the end of April.

Overseas epidemic: 860000 people.

Epidemic situation in Europe and the United States: the inventory value of epidemic beans in the United States is superior to the world, old special refueling!

The first square: the United States (216721).

Second Square Array: Italy (about 110000, curve flattening continues), Spain (over 100000), Germany (over 77000), France (over 5.5w), United Kingdom (nearly 3w), Switzerland (over 1.5w), Netherlands (over 1.2w), Belgium (over 1.3w), Austria (over w).

Third Party Front: Portugal, Norway, Sweden, Czech Republic, Ireland, Denmark, Luxembourg, Poland, Romania, Russia, Finland, Greece, Iceland, Serbia (1000 10000).

Iron ore producers: Iran (47593), Brazil (6931), Australian kangaroo (5137), Canada (9731), Malaysia (2908), South Africa (1380), India (2032).

 

< 2 > current playback: crude oil triggers a startling reversal!

1. Spot: tumble.

Wailing in the morning and singing in the afternoon! The market generally rallied higher than the decline.

The overall trading volume is bright! Terminal demand, speculative demand are all on the market; in the afternoon, there are a lot of market seals.

The market mentality is positive again.

Tangshan area billet down 30 to 3000 yuan / ton.

Raw material end:

Scrap prices remain under pressure.

The price of coke is stable. Jiao enterprise shipment is smooth, the overall inventory is neutral; the market is booming to open the fifth round of decline, it is expected that the probability of Yao fold is large.

Imports of main coking coal continued to weaken.

For more information on iron ore prices, see SMM Nonferrous Iron Market Daily Review.

This even iron early trading low, the port spot market early quotation down 10-15 yuan / ton, afternoon with the disk strong pull up, part of the transaction price rose 10-15 yuan / ton compared with the early trading. The transaction of PB powder in Shandong area is about 615-640 yuan / ton, and that in Tangshan area is about 620-640 yuan / ton. Today's steel factory inquiry is positive, some businesses have a higher willingness to ship, the overall transaction is OK. The quotation of some businesses in Tangshan area is relatively strong, mainly considering that the recent port tradable mainstream medium and low product resources are tight, but most steel mills still maintain low inventory on-demand procurement strategy. According to the transaction varieties, the transaction of lump ore is a little weak in the near future. At present, the price difference of PB powder in Shandong is still more than 200yuan / ton, and the advantage of performance-price ratio of lump ore is declining. In addition, with the increase of domestic mine production and the increase of domestic fine powder supply, the pellet premium is also under pressure.

2. Futures: Phoenix Nirvana, fire rebirth!

RB2010 main contract: a significant reduction in positions between 3103 and 3241 within the day, ending at 3229.

HC2010 main contract: a significant reduction in positions between 2933 and 3087 within the day, ending at 3078.

Iron ore i2005 contract: wide and strong concussion between 622 and 651.5 during the day, ending with 647.

Iron ore i2009 main contract: within the day between 542 and 580.5 reversed, ending at 577.5.

Coke J2009 main contract: within the day in 1568 to 1674.5 between a huge reduction in the bottom of the reversal, the end of 1665.

Coking coal JM2009 main contract: within the day between 1071 and 1131.5 rebounded sharply, ending at 1119.

 

Forecast of the current period of the Ming Dynasty

1. Spot: strong operation.

2. Futures:

RB2010 main contract: concussion between 3170 and 3290.

HC2010 main contract: concussion between 3030 and 3150.

I2009 main contract: concussion between 560 and 585.

J2009 main contract: concussion between 1620 and 1700.

JM2009 main contract: concussion between 1100 and 1150.

3. Spot operation tips: depending on their own conditions stable can be appropriate to fill the inventory, excessive catch-up is not desirable. Pick chrysanthemum east hedge, leisurely see Nanshan.

Futures hint: the global monetary easing PK overseas epidemic worsened, the financial crisis and the global economic downturn expected to strengthen, the magnitude of the earthquake increased.

Participate in the light warehouse before the festival, stop the loss and stop the profit in time.

Practice the author's proponent, more space to eat quickly!

There will be more trading in the range tomorrow.

 

RB2010 main force contract: pressure level 3270.

HC2010 main force contract: pressure level 3150.

I2009 main contract: pressure level 585.

J2009 main force contract: pressure level 1680.

JM2005 main force contract: pressure level 1150.

 

< IV > Information and heart language.

1. Central guidance Group: speed up the scientific research of Xinguan pneumonia vaccine, treatment technology and drugs. Four of the first volunteers vaccinated with the new crown vaccine have returned home from observation, and the results of successful vaccination to produce antibodies have not yet been released.

2. Sunrise interpretation of inventory data:

The total output of the five major varieties increased by 220000 tons to 9.3623 million tons, of which the output of rebar increased by 152800 tons to 3.0538 million tons.

The total inventory of the five major varieties decreased by 1.4922 million tons to 33.6873 million tons, of which the total inventory of rebar fell by 1.0204 million tons to 18.5105 million tons.

Steel mill inventory: five major varieties down 661600 tons to 10.2116 million tons, rebar down 424600 tons to 5.7469 million tons.

Social warehouse inventory: five major varieties fell by 830600 tons to 23.4757 million tons, rebar fell by 595800 tons to 12.7636 million tons.

Interpretation:

The main results are as follows: (1) the data show that the independent electric arc furnace steel plant can resume production quickly.

(2) the terminal demand has returned to normal.

(3) the inventory pressure of steel mill is greatly alleviated.

(4) the preliminary data is doubtful and is modified to a certain extent by demand.

See optimism in the overall pessimism!

3. The market copied as Turkey, CIS billet "marry" China, is not worth worrying about: first, for the total, a drop in the ocean, the night whistle! Second, the difference in quality standards, of course, as scrap resources is good.

4. The author once said: any rebound in March is null and void; a fall is doomed from late March to early April. The risk of an early fall so far in March has been fully unleashed: first, absolute low prices fully reflect the towering clouds of inventories. Second, the short-term steel downward, the terminal demand performance toughness, indicating that the terminal demand has been due! Third, the steel mill inventory pressure can be released. Of course, inventory pressure is still there, and it is still the biggest pressure to suppress the late rebound. The author believes that: in the late April, although the rebound pressure is great. But similarly, any further fall is unsustainable and ineffective.

5. Raw material end.

Scrap steel, double coke has been in the bottom stage of the point of view unchanged.

The spot price of iron ore is still under pressure, and the ore may follow the steel in the short term, but the downward view of the pressure in the medium term will remain unchanged.

6. Pay attention to the inventory of the epidemic bean base in the United States.

 

With the words of yesterday.

2. Today, under the influence of the sharp fall in futures, trading volume is still good, indicating that the return of terminal demand is resilient enough. No red rain to wash your cheeks! The impact of the deterioration of the overseas epidemic on domestic demand for building materials has been overestimated. I would like to ask the shutter people, the European epidemic in Italy, Germany, Spain case curve has been flattened! According to the law of the Yellow Crane Tower, there is a high probability of improvement after June. What is the probability that the epidemic will improve before September in the United States? Is the RB2010 contract so sad?! Of course, what needs to be reminded is: why does an organization rely on its financial advantage to increase its net space by 100000 hands in only three days? Is it doubtful that the manipulation of inventory statement data a few weeks ago has been pierced, so that the correction of tomorrow's inventory data needs to be corrected? Less than 60, 000 a day, where does the strength come from? In short, there is a routine for the sunrise of inventory data tomorrow!

3. Scrap prices down, of course, to help independent electric furnace steel plant to accelerate the resumption of production. At the same time, steel prices have fallen to this extent, can we calm down and continue to expand?

4. The profit of the long process steel mill converges greatly, and there is no doubt that the proportion of scrap steel will be further reduced. The probability of phased convergence of supply side storage.

In short, the author's forward-looking point of view: from late March to early April, the driving force of steel prices has been realized. In the later stage, depending on their own conditions, we can meet the right amount of inventory.

5. The raw material end point of view remains unchanged:

The bifocal is in the bottom stage.

The biggest risk of iron ore prices: the realization of financial attributes and long stories about overseas outbreaks to block shipments and camouflage the convergence of global demand!

6. Focus on the sunrise of inventory data.

Expected: the routine refers to a general slowdown in the rate of decline!

7. Focus on overseas outbreaks.

 

With Tuesday's heart language.

1. A lot of space is intertwined, but it is difficult to go up and down.

The overseas epidemic situation has worsened, and the impact of import and export trade in the second and third quarters is expected to intensify.

The epidemic situation in China has continued to improve, and counter-cyclical adjustment has been accelerated.

 

Short-term fundamental contradictions have not changed much.

Adverse factors:

Scrap steel falling, independent electric arc furnace capacity expansion;

The time dimension is elongated and the pressure of steel trade funds is looming;

Inventory high section; stone is still drilling price, once purple micro east, Hu Xingsen Yaoyao cost downward worry strengthened.

Favorable factors:

The steel price is relatively low, and the willingness of both sides of the steel trade to raise the price is enhanced.

Demand expansion is more deterministic, speculative demand is eager to try;

The profit of blast furnace converges and the proportion of scrap steel decreases.

2. Raw material end.

The spot price of bifocal is at the bottom stage.

The biggest risk of iron ore prices lies in: the realization of financial attributes and long stories about overseas outbreaks to block shipments and camouflage the convergence of global demand!

3. Pay attention to the inflection point of the confirmed case curve in overseas Italy and Germany, and pay attention to the continued epidemic bean base inventory in the United States.

 

With Monday's heart.

4. The overseas epidemic situation has become the foreign macro dominant logic, especially the speed of the epidemic bean bank in the United States, the impact of export trade is being realized. No, no. Domestic macro strong expectations are perjury.

Expectations are too plump, reality is bony:

Steel, domestic strong expectations are overestimated, overseas epidemic impact is underestimated. Cold rolling, hot coil weaker than rebar is overestimated.

New infrastructure is still the main theme of the impact of the hedge epidemic in the second quarter! Today is down sharply, the overall trading volume has not been greatly affected, especially the thick plate, indicating that the terminal demand gradually into the normal state, is expected to be a high probability event after mid-April!

Current fundamental disadvantages:

First, high inventory (including social library overflow) and supply-side expansion concerns (scrap prices fall to further accelerate the return of independent arc production).

Second, blast furnace cost support has been weakened, coke prices, the author believes that there is no room for decline, iron ore prices once the long story lies pierced, the downward space can not be underestimated.

Third, the screw coiling difference is still expanding under the action of inertia, forcing the molten iron to flow to the thread or medium and heavy plate.

Favorable factors:

First, the demand return period should be period, the demand is the time positive correlation function is more deterministic.

Second, the absolute low price fully reflects the inventory floating cloud.

Third, the counter-cyclical factor adjustment, the center of gravity is still infrastructure.

Fourth, although the overseas epidemic has caused the default or reduction of export orders, the export price window has been opened, and the impact is generally limited.

Fifth, the Belt and Road is still walking.

Sixth, the current market so-called rebar price will penetrate the blast furnace cost line, the key is how to define. The author believes that piercing the dynamic cost line, do not worry for the ancients; static cost takes into account iron ore factors, the existence of this probability.

Note: after replenishing inventory, it will be more stable after the first ten days of April.

In short, the overall steel market in April, the upper and lower driving forces are limited.

5. Iron ore, the impact of the epidemic on stone transport is overestimated, the impact of the epidemic on global demand is underestimated; financial attributes are deliberately overshadowed by capital manipulation. Once purple slightly east, Hu Xingsen is bright. Take it easy.

6. Pay attention to the epidemic situation in Europe and America.

< 5 > prospects for the steel market in the second quarter.

I. Prediction of macro prospects at home and abroad

Domestic macro vision:

First, the epidemic gentleman mistakenly hit the Yellow Crane Tower, counter-cyclical adjustment accelerated.

During the period from the outbreak of the Yellow Crane Tower to the pre-outbreak of the overseas epidemic, the domestic counter-cyclical regulatory factors increased and accelerated, mainly including and not limited to the new infrastructure, tax reduction, reduction of accuracy and other policy incentives to counter epidemic injury and the "six stable" target tasks, even after the "two sessions", because of the overseas epidemic outbreak "six stable" national policy to a certain extent, there is a correction probability, but considering the role of inertia and lag, the second quarter can and must be reflected. That is, strong expectations will be fulfilled in the second quarter.

Second, there is uncertainty in China's monetary policy in the later period.

In order to rescue the current liquidity crisis in the market, and in response to possible economic turmoil, the Fed has launched an unlimited, bottomless QE monetary easing stimulus. There is no doubt that all non-US countries have paid for it, and no matter what measures they take, imported inflation is doomed.

In the short term, stimulated by the Fed's unlimited easing program, suspended the liquidity crisis, calmed the market sentiment is effective, U. S. stocks rebounded sharply.

In the medium term, the main contradiction of the US Emperor is the epidemic situation. At the beginning of the epidemic, there is uncertainty about the extent to which the epidemic has deteriorated, and this year's recession is deterministic. The recession began with an epidemic. Consumers had to spend less because of the epidemic, and producers had to shut down because of the epidemic. Enterprises can not produce normally because of the impact of the epidemic, at the same time, they have to face a sharp reduction in orders brought about by shrinking consumption in the future. Many enterprises will have to face the risk of bankruptcy because of the cash flow crisis caused by the sharp decline in income, and the resulting rising unemployment rate will aggravate the economic recession. These economic activities, the Fed injection of liquidity to promote the role is very limited.

Bet all the money on the bottom of the deposit box on the gambling epidemic! Premature excessive consumption of policy space, what if the epidemic gets out of control? Can the trick of sucking blood and non-American people's sweat in 2008 come true again? Let's see.

In the long run, the great change in the world pattern is deterministic, but who is in charge of uncertainty!

Looking at the great China, China's monetary policy is facing a big test again! Is it possible to follow in the footsteps of the non-US developed economies and follow the old path of 2008? Or are you sure to move on? Or is the "six stable national policy" adjusted to "protect finance and employment"?. No, no. Test the wisdom of decision makers again! In short, hard wounds can not escape! After the "two sessions", the monetary policy of a great country is full of uncertainty, and the market is now strongly expected to cut interest rates in April. The G20 meeting delivered 35 trillion yuan in monetary stimulus to deal with the epidemic and hedge against the global recession! Listen to his words and observe his deeds. The author foolishly believes that if the water release of Chinese currency can stop in the direction of world epidemic control and "Belt and Road", that is, to implement a community with a shared future for mankind, and to export inflation to the United States. It's not beautiful! The Federal Reserve needs China to prepare for the policy response to the imported inflation in non-American countries, especially in developing countries, regardless of the consequences of the secondary economic and social disasters brought about by the continuous development of the epidemic.

In short, benevolence sees benevolence and wisdom sees wisdom.

Third: the epidemic sweeps the west wind, how can the secondary disaster endure.

The outbreak period of the overseas epidemic situation, especially the United States Emperor has the tendency to catch up from behind, although the medical level is not moved, but the political and economic interests override the rest of the world.

Above, there is no suspense on the European and American epidemic Cup champion podium! For the good is the happiest, for the evil can not escape. A long way of good reincarnation, the vast sky spared who! Coronavirus is the common enemy of mankind at present, the practice of a community with a shared future for mankind is the truth, and the control of the epidemic bean base is the essential work of the United States, and it is also the concrete practice of being responsible to mankind. The United States not only does not face up to the main contradiction of the epidemic bean base, but gives priority to opening up an unlimited easing policy! If you hurt an "enemy" by 1000, you will injure yourself by 800. The Great Recession and the Great Depression are doomed! Similarly, overseas outbreaks have caused secondary disasters in China. There is no doubt that imports and exports shrank greatly in the second and third quarters.

Fourth: the story of farmers and snakes should not be forgotten.

During the period of the Yellow Crane Tower wearing a cover to fight the epidemic, the United States Emperor etiquette and shame, four-dimensional atelectasis. Many senior officials and dignitaries of the US imperialist government are afraid that China will not be disorderly and gloat, hoping that the epidemic will deal a fatal blow to China's economy and geopolitics, constantly attack and stigmatize the Chinese virus, and engage in political "epidemic poison." through the so-called "Taipei Act," the Senate and House of Representatives have colluded with the Min Jin Party in Taiwan, colluded, grossly interfered in China's internal affairs and continued to escalate, and the media used a powerful network platform to unscrupulously publicize false information. Militarily, show off your muscles and make threats on the doorstep of China. No, no. It's hard to tell!

After the epidemic, the US Emperor further contained Greater China in an all-round way, and it was by no means alarmist! Chairman Mao's quotation: the United States imperialism will not die, we must always raise the police!

II. Prediction of the fundamentals of the Iron and Steel Industry

1. Der Spiegel is a high judge of supply and demand.

Supply side.

At present, the profit of long-process tonnage steel is 300-400, and some of the original long-process shutdown and maintenance are gradually resuming, even if the steel enterprises shut down by the epidemic in Hubei Province will resume production no later than mid-April. Independent electric arc furnace steel mills lose less than 100 yuan or even some of the steel enterprises that enjoy tax rebates and enjoy local government subsidies due to the downward movement of scrap prices. No, no. It can be determined that production in April has become normal.

Quantitative valuation: 6800 / 700 = 75 million tons

 

The long process output is 7.11 × 1.1 / 80 / 92 / 6.800, that is, 68 million tons.

The capacity utilization rate of independent electric arc furnace is 70%, 7 million tons.

The demand side.

Throughout the table trading volume in late March and eliminate speculative false demand, and combined with including but not limited to cement prices, concrete mixing stations, pipe pile demand, PC steel bar prices verify each other, and then peep at the start of real estate and steel net export trade considerations. The return period of qualitative demand in April is about 95% of the normal.

Quantitative valuation: 6966 tons 350 = 73.16 million tons

Domestic apparent demand: 7333mm 0.956966 (ten thousand tons)

Net exports are estimated at 3.5 million tons.

The relationship between supply and demand is broadly consistent.

2. Solution of towering floating Cloud in inventory

Seek proof according to the inertia of thinking:

The total inventory of five varieties is 35 million tons, and the total stock of rebar is 19.5 million tons. Even if the data in the table are objective and practical, the maximum inflection point of perennial inventory is still higher than about 10 million tons. Absolute high section of the inventory to the perennial inflection point value at least a month, steel price rebound road is a long way to go!

Reverse thinking:

One is: precisely because the inventory is towering and floating clouds, there is now "land price" steel.

The second is: the steel mill price is determined, with the time dimension for the space dimension.

Third: the so-called inventory towering clouds, just used to the concept, get used to it! Inventory is only a static index of the relationship between supply and demand, and the essence of price is determined by the relationship between supply and demand.

3. The epidemic caused the absence of demand, there is no doubt to rush to make up for classes.

4. There is a high probability of retrograde strength along the Belt and Road.

To sum up, steel prices in April are still negative walking, the upper and lower driving forces are limited, in May into the ready stage, June is expected!

 

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)

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