[SMM issue current Daily Review] Sidu Chishui produces strange soldiers

(13 April)

< 1 > in terms of epidemic situation.

Zhong Nanshan: now is not the time to take off the mask. I don't think the vaccine can be made in three or four months. China has entered the second phase of the epidemic, while other major countries are still in the first stage of the outbreak. This means that the chances of human-to-human transmission are very high, and wearing a mask is still an important means of self-protection. Some of the drugs now being tested, such as chloroquine, are sure to be effective. There are some traditional Chinese medicine, such as Lianhua Qingwen, outstanding anti-inflammation, traditional Chinese medicine Xuebijing, the treatment of severe patients is also effective, we are summing up.

Zhang Wenhong: whether it is drugs or vaccines on the market need to go through a strict process, do not have too high imagination in the short term. The mortality rate of critically ill patients after taking the drug Redcivir was 13%, which is still relatively high. Redsevir can be considered an effective drug, but it is not a specific drug. Vaccine research and development in China and the United States are moving relatively fast, but the vaccine to do safety and efficacy experiments, the normal time to complete 1-2 years, according to the current practice, as soon as a year.

The new situation of domestic epidemic situation: 1378 cumulative cases were imported and 1064 asymptomatic infections.

Overseas outbreak: > 1.775 million people.

Epidemic situation in Europe and the United States:

The first square array of the United States: more than 560000 confirmed cases, 22115 deaths, the United States is absolutely priority! Come on, old man!

Europe: the characteristics of the inflection points of Italy, France, West and Germany are obvious.

The second square array (diagnosis / death).

Italy (> 156000 / 19899), Spain (> 166000 / 17209), France (> 133000 / 14412), Germany (> 127000 / 3022), United Kingdom (> 85000 / 10629).

Third Square Array: Netherlands, Belgium, Austria, Portugal, Switzerland, Sweden, Russia (1w / 3w).

Asia and Stone Associates:

Iran (> 71000), Turkey (> 56000), Israel (11235), Canada (24384), Brazil (22318), India (9240), Japan (7423), Australian kangaroo (6359), Malaysia (4683), Indonesia (4241), South Africa (2173), Philippines (4648).

Note: Africa and India are worried!

< 2 > current playback:

1. Spot: the overall rebound over the weekend continues, with increases ranging from 20 yuan to 70 yuan per ton.

Trading volume: hot trading in early trading, high in the afternoon show general. The overall beauty.

The market mentality is more positive.

Tangshan area billet cumulative rebound 30 to 3060 yuan / ton.

Raw material end:

Scrap prices rebounded as scheduled, with increases ranging from 70 to 150 yuan per ton over the weekend.

Coke price stability: the first round of coke enterprises up 50 yuan / ton, steel companies are still silent.

The coking coal market maintains stability, wait and see thick. Prices are still under pressure.

Iron ore market: today's iron ore market as a whole stable and strong operation, traders quotation stable or slightly up 5 yuan, driven by the disk and materials, traders strong mentality, steel mills on demand inquiry procurement, transactions can be done. Shandong direction PB powder deposit 650 + yuan / ton, Tangshan direction 660 + yuan / ton.

2. Futures: the black system as a whole is strong concussion, rush high and fall back in the afternoon.

RB2010 main contract: a significant increase in positions between 3356 and 3417 within the day continued to rebound, ending at 3387.

HC2010 main contract: within the day between 3184 and 32553 continued to rebound, ending at 3220.

Iron ore i2009 main contract: in the day between 593 to 607 rushes down, the end of the day 596.

Coke J2009 main contract: in the day between 1716 and 1749 between the rise and fall, the end of 1730.

Coking coal JM2009 main contract: within the day in 1119 to 1143 between the strong shock, the end of 1132.

< 3 > current forecast for tomorrow

1. Spot aspect: partial strong shock is dominant.

2. Futures:

RB2010 main contract: concussion between 3340 and 3430.

HC2010 main contract: concussion between 3170 and 3280.

I2009 main contract: concussion between 585 and 610.

J2009 main contract: concussion between 1670 and 1750.

JM2009 main contract: concussion between 110 and 1150.

3. Spot operation tips: high throw low suction rolling operation.

Futures trading tips:

Thread, hot coil: chase more cautious, within the range of callback cloth more.

Iron ore: the trend air meets the high intervention, the short-term range high altitude is much lower.

Coke: trading within the range is neutral.

Coking coal: tasteless wait-and-see food or trading within the range is mainly neutral.

Timely stop profit stop is a hard road.

RB2010 main force contract: support level 3340, 3270.

HC2010 main force contract: support level 3150, 3090

I2009 main contract: support level 585, pressure level 613.

J2009 main contract: support level 1670, pressure level 1750.

JM2005 main force contract: support level 1100, pressure level 1150.

< IV > Information and heart language.

1. The central bank talks about the "three stable" goal of real estate: stabilizing the expectations of the real estate market is particularly important.

Zou Lan, director of the financial markets department of the central bank, said that since 2016, the central bank has done some work to curb the excessive flow of funds to the real estate industry, and achieved more obvious results. The real estate industry is characterized by capital-intensive industries, and the cycle is very long, the central bank has always attached great importance to policy stability, continuity and consistency. In the tone of the "three stability" of the real estate market (stabilizing land prices, stabilizing housing prices, and stabilizing expectations), stabilizing expectations is particularly important, and instability is more harmful to the economy. The next step is to do a good job around the goal of "three stability" in accordance with the overall requirements and spirit of the central government.

2. Chairman tension of the real estate developers of the whole Union: it is proposed that the real estate market should be appropriately loosened and the "two limits" should be appropriately lifted by region, especially for third-and fourth-tier cities and some provincial capital cities; encourage foreign investment in real estate, especially in hotels, shopping malls, office buildings and other commercial real estate; properly liberalize the land market and invest in some diversified products to stimulate real estate development.

3. Nanjing announced four action plans for new infrastructure, new consumption, new industries and new cities. Specifically, we will develop new infrastructure, accelerate the construction of 346 new infrastructure and related industry projects with a total investment of 545.4 billion yuan, cultivate new consumption, try out a 2.5-day rest system per week, and expand new industries, with a total scale of more than 400 billion yuan in 2020; build a new city, complete the transformation of 3 million square meters of shantytowns in the city, and speed up the construction of Nanjing International Hospital.

4. [Shagang issued Phase 4-2 Building Materials Price Adjustment Policy] Shagang issued Phase 4-2 building materials ex-factory price, of which thread, wire rod and disc screw are stable, current rebar 3700 yuan / ton, disk snail 3800 yuan / ton, wire rod 3760 yuan / ton. The thread of the previous period is 170 yuan / ton, the disk screw is 120 yuan / ton, and the wire rod is 90 yuan / ton. The acceptance discount remains unchanged.

5. [OPEC + reached the first phase of the production reduction agreement will cut crude oil production by 9.7 million barrels per day in May and June this year] the OPEC + emergency videoconference hosted by Saudi Arabia ended in the early hours of April 13, Beijing time. Saudi media reported that the participating countries finally reached an agreement to cut production, the first phase of which will cut crude oil production by 9.7 million barrels per day in May and June this year, which is also the largest production reduction agreement reached since the establishment of the OPEC + mechanism.

6. [Japanese iron production will stop production of two more blast furnaces in April] Japan will stop production of two more blast furnaces in April, which are likely to resume operation in the future. According to relevant sources, in order to cope with the sharp decline in demand for iron and steel products, Japanese iron making will reduce overall steel production. It is planned to shut down the No. 1 blast furnace with a capacity of 4.4 million tons / year at Ludao Iron Institute in mid-April and the No. 1 blast furnace with a capacity of 2.1 million tons / year at Keshan Iron Institute in late April. According to previous reports, Japanese iron closed the No. 2 blast furnace with a capacity of 1.6 million tons per year in Hiroshima prefecture in February. In addition, Japanese ironmaking will stop production of 156000 tons / year steel pipe mill and 400000 tons / year hot-dip galvanizing production line at Junjin Iron making Institute in Chiba Prefecture this year, close the No. 2 blast furnace at Bafan Plant and all steelmaking equipment (with a total capacity of about 2 million tons / year).

Attaching heart language

1. Love the sunny price after the Ming Dynasty, after the festival Xiao Yangchun forward-looking prediction to land on the ground. No, no. Steel has rebounded sharply for 4 consecutive days, the rebound range of spot prices is far less than, the recovery needs to be cautious, the probability of callback is large.

Scrap prices stabilized and rebounded, profit-driven supply-side expansion is more deterministic, but the overall increment is limited. The key is the strong return of building materials demand, demand growth rate is greater than the supply growth rate, the late high inventory destorization acceleration is a high probability event! And pay attention to whether the rush demand return period (real estate first mentioned "three stable", part of the regional regulation and control loosening is a high probability event)! For those who are slow to realize, they can replenish their inventory in the right amount in case of a callback.

2. Iron ore: short-term port inventory base, domestic rigid demand is OK, high base difference, steel mill high inventory willingness to weaken and other factors to follow the adult dance probability! In the medium term, overseas outbreaks have affected demand, forcing an increase in the proportion of mines sent to China. Shipments of Australian kangaroos and Brazil are on the rise, and the increase in traffic is on the verge of an arrow. In short, the author's point of view remains unchanged.

3. Bifocal. Before the expansion of short-term steel mill profits, coke enterprises to rise difficult to land, coke interval shock probability! The mid-term rise and fall is a probability event. By the same token, coking coal: before the loss of coke enterprises has not been repaired, the market price of coking coal is still under pressure.

4. Focus on overseas outbreaks and crude oil shows.

< 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 the House of Representatives have colluded with the jin Party of the people of Taiwan, colluded, grossly interfered in China's internal affairs and continued to escalate, and the media unscrupulously publicized false information by using a powerful network platform. 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)