(20 April)

< 1 > in terms of epidemic situation.

1. Comprehensive Group of Joint Prevention and Control Mechanism of the State Council: notice on further doing a good job in the Detection of New Crown virus during the epidemic period. All level III general hospitals should establish clinical laboratory laboratories that meet the standards of biosafety level II and above, and have the ability to independently carry out new coronavirus tests; disease control institutions at all levels and qualified specialized hospitals, secondary hospitals, and independently established medical laboratory laboratories should also strengthen laboratory construction and improve testing ability.

2. Harvard School of Public Health: the new crown virus will break out again this winter after the pandemic. Until 2022, the United States may need to implement "intermittent" social alienation interventions unless intensive care capacity is significantly improved or specific drugs or vaccines are available.

3. Domestic epidemic situation: a total of 1583 imported cases, asymptomatic infection 990, 4642 deaths.

4. Overseas epidemic: > 2.327 million / 161376 deaths.

Epidemic situation in Europe and the United States:

The first square array of the United States: more than 765000 confirmed cases, 40587 deaths, the United States gives priority to thorough!

Europe:

The second square array (diagnosis / death).

Italy (> 178000 / 23660), Spain (> 198000 / 21238), France (> 154000 / 19744), United Kingdom (> 121000 / 16095), Germany (> 14.6 / 4708).

The third square array (1550 000): Russia (> 42000), Belgium (> 38000), Netherlands (> 32000), Portugal (> 20, 000), Ireland (> 15000), Switzerland (> 27000), Sweden (> 14000), Austria (> 1. 4).

Asian and stone related countries: kangaroos in Iran and Australia continue to improve. Brazil is a worry.

Turkey (> 86000), Iran (> 82000), Brazil (> 38000), Canada (> 35000), India (> 17000), Peru (> 82000), Israel (> 13000), Japan (> 10, 000), Australian kangaroo (6612), Malaysia (5389), Indonesia (6575), Singapore (6588), South Africa (3158), Philippines (6259).

< 2 > current playback:

1. Spot market prices: overall weak volatility over the weekend. South China Guangzhou, East China Shanghai, Hangzhou fell 10-20 yuan / ton; North China by Tangshan production restrictions to boost the performance is slightly better, the overall weekend has been dominated by horizontal shocks.

Volume: stay strong.

The market mentality is cautious.

Tangshan area billet accumulated upward 20 to 3100 yuan / ton.

Raw material end:

Scrap prices are still running on the strong side.

Double coke: coke temporarily stable, the first round of rise and fall; long-process production expansion, but at the same time limited production in Tangshan area; steel plant supply expansion is generally limited. A short-term dilemma.

Coking coal: coking coal weak operation, inventory accumulation, coke enterprise loss, coal price pressure is still the same.

Iron ore market: the spot market of the port has risen slightly, the Shandong direction PB powder mine 655-660 yuan / ton has the transaction, Tangshan area PB powder mine 665-670 yuan / ton has the transaction. Steel mills still purchase cautiously as needed, and their willingness to catch up is weak. Traders are active in shipping. It's a good deal.

2. Futures:

RB2010 main contract: within the day between 3405 and 3360 positions rose and fell, the end of 3362.

HC2010 main contract: in the day between 3249 and 3211 rose and fell back, the end of 3218.

Iron ore i2009 main contract: within the day between 612 to 624 shock upward, the end of 620.

Coke J2009 main contract: within the day between 1728 and 1706 horizontal plate concussion, the end of 1708.5.

Coking coal JM2009 main contract: within the day between 1140 and 1127.5 horizontal disk concussion, the end of 1132.

< 3 > current forecast for tomorrow

1. Spot aspect: weak shock is dominant, but the space is limited.

2. Futures:

RB2010 main contract: concussion between 3400 and 3320.

HC2010 main contract: concussion between 3250 and 3180.

I2009 main contract: concussion between 625 and 610.

J2009 main contract: concussion between 1750 and 1670.

JM2009 main contract: concussion between 1180 and 1100.

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

Futures trading tips:

Thread, hot coil: it is suitable for high altitude and low operation in the short line range. In the middle of the period, most of them gradually stepped in on bargains.

Iron ore: short-term range of high throwing low suction, fast in and out of the appropriate.

Coke: trading within the range is neutral.

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

Timely stop profit stop is a hard road.

RB2010 main contract: support level 3330.

HC2010 main force contract: support level 3210, 3170.

I2009 main contract: support level 610, pressure level 624.

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

JM2005 main force contract: support level 1100, pressure level 1180.

< IV > Information and heart language.

1. The meeting of the political Bureau of the CPC Central Committee: we must adhere to the general tone of seeking progress in the midst of stability. Stability is the overall situation, and we must ensure that the epidemic does not rebound, stabilize the basic economic market, and hold the bottom line of the people's livelihood. Greater macro-policy efforts should be made to hedge the impact of the epidemic. A proactive fiscal policy should be more active and promising and raise the deficit rate. A prudent monetary policy should be more flexible and moderate, and the liquidity should be kept reasonable and abundant by means of rate reduction, interest rate reduction, re-lending, and so on. We should seize the opportunity to promote reform, be good at solving problems in development by means of reform, and improve the system and mechanism for the market-oriented allocation of factors. It is necessary to firmly open up to the outside world, ensure the smooth flow of international logistics, strictly control the quality of the export of epidemic prevention materials, and promote the high-quality development of the Belt and Road Initiative.

2. The 17th meeting of the standing Committee of the National people's Congress (NPC) will be held in Beijing from April 26 to 29.

3. The people's Bank of China cut (LPR) to 3.85 per cent in the one-year loan market, up from 4.05 per cent.

The people's Bank of China cut (LPR) to 4.65 per cent in the five-year loan market, up from 4.75 per cent.

4. Central bank: a working paper entitled "Research on systemic Financial risk spillover effects". Four main conclusions are drawn: first, the network structure of the financial system will change with the development of risk, which is the main reason for the nonlinear change of systemic risk and the dynamic change of risk contagion relationship; second, different types of risk transmission methods and impact effectiveness are different; third, when systemic risk breaks out, the main channel of risk transmission is between banks and securities. Fourth, trust, financial control and other non-bank financial institutions have weak ability to resist risks.

5. It is reported that, driven by the resumption of work and production of major projects in various localities, some cement plants are working overtime to produce at full capacity. Although affected by the epidemic, the output of the cement industry fell by 23.9% in the first quarter, but with the resumption of production, the prospect of the cement industry is still good, and even ushered in a V-shaped rebound in the whole industry. At the same time, the inventory of cement enterprises continued to decline. Among them, the clinker inventory along the Yangtze River in Anhui Province has dropped to about 50%, and the cement inventory in various prefecture-level cities has even dropped to 35%, and the highest is only 70%.

6. On Saturday, April 18, 2020, Beijing time, Vale released its report on iron ore production for the first quarter of 2020 on its website, as follows:

Production: in the first quarter of 2020, the output of iron ore powder was 59.61 million tons, down 23.9% from the previous month and 18.2% from the same period last year, below the previously announced guidance (6300-68 million tons). In the first quarter of 2020, pellet production was 6.93 million tons, down 26.4 percent from a month earlier and 43.1 percent from a year earlier. The main reasons for the decline in production are (1) due to the irregular maintenance of long-distance conveying equipment, the impact of concentrated bad weather, and due to the postponement of the start-up of Morro No. 1 mining area, the operation of, Northern Range mining area is limited, the northern mining area system has a reduction of 4.5 million tons. (II) purchases from third parties decreased by 1.8 million tons as a result of torrential rains in southeastern Brazil. (3) due to the operation of Itabira complex, there is a reduction of 2.1 million tons in the southeast mining area.

Sales: in the first quarter of 2020, iron ore powder sales were 51.66 million tons, down 33.7% from a month earlier and 6.8% from a year earlier. In the first quarter of 2020, pellet sales were 7.31 million tons, down 33.3% from a month earlier and 40.6% from a year earlier. The total sales volume is about 59 million tons, which is basically consistent with the output of the current quarter.

Guidance: iron ore powder production in 2020 is between 3.1 and 330 million tons (the previous figure was 3.4 to 355 million tons). The directed production of pellets in 2020 was between 3500 and 40 million tons (the previous figure was 44 million tons).

7. On Friday, WTI May crude oil futures closed down 8.05% at $18.27 a barrel, down 21.28% for the week. Brent June crude oil futures rose 0.93% to $28.08 a barrel, down 11.75% for the week.

8. Steel prices do not have the conditions for a sustained rebound in the short term (from late April to early May), but they do not have the driving force for a sustained decline. The main logic is detailed in the weekly review, do not repeat! During the period of another fall is a good opportunity to replenish inventory! Hope and go and cherish!

Steel back, only base difference suppression; waiting for spot strength guidance, the rebound can still continue to move forward! Pay attention to the RB2010 main contract 3350 3320 support, meet the low gradually accept.

9. Raw material end.

Scrap prices are prone to rise but fall in the short term due to the expansion of supply.

Bifocal price stability, logic and point of view remain unchanged.

Iron ore is affected by Brazil's Vale plan to reduce production, market funds are more keen to copy the epidemic to affect production, while ignoring the impact of reduced production by steel mills in Europe, the United States, Japan, South Korea and other countries! Watching it is the hard way! Short-term logic: first, there is still a long way to go to expand the output of the long process. Second, scrap steel rose sharply, supporting iron ore prices. Third, Vale news copied as a follow-up walk. Fourth, the profit of the long process is about 300 yuan / ton, and it is expected to replenish the inventory before the festival. The short-term price is still on the strong side, but the upstream space is limited, the author's medium-term point of view remains unchanged.

10. Pay attention to the overseas epidemic situation and the upcoming "two sessions" report!

Note: the intensity of counter-cycle regulation is unprecedented, there is no doubt! New and old infrastructure are all in battle! But it was hard for GDP to hold back in the second quarter.

With Zhou's comments.

Hanging mirrors judge supply and demand!

1. On the demand side: demand for steel and silver samples reached 4.75 million tons on Thursday. There are three worries or doubts in the market: first, steel traders feel that goods are not easy to sell, second, terminal demand hoarding, recessive explicit, and third, speculative demand comes into the market a lot. The author believes that do not worry about the ancients! What about the shutter? Is there no speculative demand for demand in the year-on-year peak season? Is demand so good in the year-on-year peak season? At the same time, whenever the recent steel fall, can maintain 220000 tons of rebar trading volume, such trading volume accounted for speculative demand? There is no denying that there is terminal demand from the end of February to early March, and the virtual table of food should be removed from the social library in advance, but at the same time, should we not consider that there is a quantitative inventory of terminal demand in normal times (without the impact of the epidemic)? This is naked care for one thing and the other! In short, the author believes that the return period of demand is not only indisputable, but also should think about the return period of rush demand!

2. On the supply side: on Thursday, the total output of the five major varieties reached 10.12 million tons, and the output of rebar was 3.435 million tons. The peak output in 2019 was 1107 tons and 3.815 million tons of rebar (see Table 2 for details). The operating rate of long process is about 81%, and that of independent arc furnace steel plant is 70%. Driven by profits, there is no doubt that output is expanding, but it is not far from the peak! It is expected that it will take another two weeks (early May), and it can be seen that the expansion of production is predictable and limited.

(3) the expectation of replenishing inventory before May Day in the market, the author does not agree, the market inventory is still high face, why not worry about buying goods? At the same time, there is a disturbance of weather factors in late April!

(4) despite the acceleration of destockpiling, there is still some way to go before the peak of the impact of the epidemic. What is the driving force for a sharp rebound?.

(5) deduced from the supply side, the high demand for raw materials remains for about 2 weeks, and how long can the long story of iron ore be told. No, no. The author's mid-term point of view remains unchanged, the epidemic affects the demand for stone more brilliantly. No, no.

To sum up, steel prices continue to rebound difficult to continue, from late April to early May to save the probability of the last decline in the second quarter!

The rest of the logic remains the same, do not repeat!

< 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!

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