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[SMM current Daily Review] under Gracilaria, see Nanshan leisurely
Apr 23,2020 19:57CST
The content below was translated by Tencent automatically for reference.

(23 April)

< 1 > in terms of epidemic situation.

Domestic epidemic: imported cases / asymptomatic / severe / 1616 984.

Zhong Nanshan: we made it. Zhang Wenhong said it is not feasible to carry out universal screening for nucleic acid: you cannot expect that there will be no cases at all. The study says the new crown virus remains in the eyes of patients for several days.

Overseas epidemic situation: new cases / confirmed cumulative cases / deaths / 635337 / > 2.565 million / 179874.

Epidemic situation in Europe and the United States:

The first square array of the United States: new cases / confirmed cumulative cases / deaths / 26248 / > 849000 / 47681.

Europe: Germany, Italy, France, Spain, Austria, the Netherlands and other countries continue to improve. Russia is in the outbreak phase.

The second square array (confirmed / (new) / dead).

United Kingdom (> 134000 / (1143) / 18151), Italy (> 187000 / (3370) / 25085), Spain (> 208000 / 21717), France (> 159800 / 182721340),

Germany (> 15.1 1609 5385).

Third Square Array (1700000):

Russia (> 62000), Belgium (> 41000), Netherlands (> 35000), Portugal (> 21900), Ireland (> 16600), Switzerland (> 28200), Sweden (> 16000), Poland (> 10 000), Austria (> 21900).

The rest of the world: kangaroos in Iran and Australia continue to improve. Brazil and Turkey are stable, India, Ecuador, Saudi Arabia and Canada are in the stage of development.

Turkey (> 98000), Iran (> 85900), Brazil (> 46100), Canada (> 40900), India (> 21700), Peru (> 40900), Ecuador (10850), Israel (> 14500), Saudi Arabia (12772), Chile (1.12), Japan (> 12000), Chile (> 10800), Mexico (> 10500), Pakistan (> 10500), Australian kangaroo (6660), Malaysia (5532), Indonesia (7775), Singapore (11178), South Africa (3635), Philippines (6981).


< 2 > current playback: early strength, weak afternoon, rush high and fall back.

1. Spot market price: the actual morning rise is the continuation of yesterday afternoon did not close the quotation, afternoon fall back. Most of the market was more stable than yesterday, Shanghai and Hangzhou were the same as yesterday.

Trading volume is more convergent than yesterday, but the overall situation is not bad.

The market mentality is cautious and positive.

20 to 3090 yuan per ton of billet in Tangshan area.

Raw material end:

The price of scrap steel has risen in part.

The price of coke is stable. Mainstream coke enterprises held a market analysis meeting, the meeting unanimously proposed on April 28 coke prices will be raised by 50 yuan / ton.

The prices of imported coking coal mostly fell.

Iron ore market: Port spot market to follow the mining dance, early strong afternoon weak: Shandong PB powder 645 + yuan / ton transaction, Tangshan area PB powder transaction 655 + yuan / ton transaction. Trading is down. The weekly replenishment of some steel mills has come to an end, a small number of on-demand procurement, the overall transaction is more cold than yesterday.

2. Futures:

RB2010 main contract: in the day between 3388 and 3325 rose and fell back, the end of 3330.

HC2010 main contract: in the day between 3225 and 3162 rose and fell back, the end of 3173.

Iron ore i2009 main contract: in the day between 617.5 and 601.5 rushed back down, the end of 604.5.

Coke J2009 main contract: within the day in 1719.5 to 1680 between the rise and fall, the end of 1683.

Coking coal JM2009 main contract: within the day between 1119 and 1090 concussion downward, the end of 1100.5.


< 3 > current forecast for tomorrow

1. Spot aspect: stability is the main.

2. Futures:

RB2010 main contract: concussion between 3300 and 3400.

HC2010 main contract: concussion between 3150 and 3250.

I2009 main contract: concussion between 590 and 615.

J2009 main contract: concussion between 1680 and 1730.

JM2009 main contract: concussion between 1070 and 1140.

3. The spot operation hint: the high storekeeper continues to sell the low suction rolling operation mainly, the inventory low understanding enters the replenishment inventory stage.

Futures trading tips:

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

Iron ore: it is suitable for high altitude and low flat rolling operation in the short range.

Coke: it is suitable for high throwing and low suction operation in the short range.

Coking coal: short-term range within the short-term trading is appropriate.

Timely stop profit stop is a hard road.

RB2010 main force contract: support level 3300, 3270.

HC2010 main contract: support level 3150.

I2009 main contract: support level 590, pressure level 615.

J2009 main contract: support level 1650, pressure level 1710.

JM2005 main force contract: support level 1060, pressure level 1140.


< IV > Information and heart language.

1. [world Steel Association: global crude steel production fell 6 per cent in March 2020 compared with the same period last year] in March 2020, the crude steel output of 64 countries included in the World Iron and Steel Association was 147.1 million tons, down 6.0 per cent from the same period last year. As the impact of the new crown pandemic on economic and social activities continues, many of the production data for this month are based on estimates from national and regional associations, which we are likely to revise in next month's production report.

Global crude steel production was 443 million tons in the first quarter of 2020, down 1.4 per cent from a year earlier. Crude steel production in Asia was 315.2 million tons in the first quarter, down 0.3 per cent from a year earlier. Crude steel production in the EU region was 38.3 million tons in the first quarter, down 10.0 per cent from a year earlier. Crude steel production in North America was 29.5 million tons in the first quarter, down 4.0 per cent from a year earlier.

In March 2020, China's crude steel production was 79 million tons, down 1.7 percent from the same period last year; India estimated crude steel production at 8.7 million tons, down 13.9 percent from the same period last year; Japan estimated crude steel production at 8.2 million tons, down 9.7 percent from the same period last year; and South Korea's crude steel output was 5.8 million tons, down 7.9 percent from the same period last year.

2. [affected by the foreign epidemic, steel exports dropped significantly in the first quarter compared with the same period last year] according to the latest data from the General Administration of Customs, in March 2020, China exported 4.09 million tons of iron and steel plates, an increase of 8.5 percent over the same period last year, and from January to March exports totaled 8.83 million tons, down 13.3 percent from the same period last year In March, China exported 101 tons of iron and steel bars, down 16.7% from the same period last year, and 204 tons from January to March, down 33.6% from the same period last year. Affected by the epidemic situation abroad, China's iron and steel exports fell sharply in the first quarter compared with the same period last year, resulting in an increase in domestic steel trade pressure and a decline in domestic steel prices. In the second quarter, as the epidemic situation abroad has been gradually brought under control and exports have returned to normal one after another, the pressure on domestic trade in steel is expected to ease. [SMM Steel]

3. Sunrise interpretation of inventory data:

The total output of the five major varieties increased by 168700 tons to 10.2922 million tons, of which the output of rebar increased by 140300 tons to 3.5747 million tons, and the output of hot rolling increased by 30400 tons to 3.1243 million tons.


The total inventory of the five major varieties decreased by 1.6483 million tons to 28.287 million tons, of which the total inventory of rebar decreased by 898700 tons to 15.119 million tons, and the total inventory of hot rolling decreased by 4.6965 million tons.


Steel mill inventory: five major varieties fell by 413000 tons to 8.1548 million tons, rebar by 261600 tons to 4.332 million tons, hot rolling by 33400 tons to 1.2133 million tons.


Social warehouse inventory: five major varieties fell by 1.2353 million tons to 20.1322 million tons, rebar by 637100 tons to 10.7799 million tons, hot rolling by 206300 tons to 3.4832 million tons.



The main results are as follows: (1) the yield of the five varieties continued to increase, but the growth rate decreased significantly, in line with the author's expectations, the last 1.2 weeks will still increase, but the weekly decline is a high probability event.

(2) demand is not as good as last week, but it is generally strong. The demand for building materials has been further confirmed.

(3) de-inventory is still on the way. Inventory pressure has been further alleviated.

(4) the total inventory of the five major varieties is 28 million tons, and the total stock of rebar is 15 million tons, which is expected to be in the field from last year's peak.

Overall interpretation: neutral.

4. The steel author's point of view remains unchanged, the operation suggestion steps into the bargain replenishment inventory stage. Iron ore diamond prices are inevitable in the short term, the long position story leaves the last chapter of the steel mill to fill the inventory before the festival. High altitude point of view remains unchanged, it is appropriate to participate in the light warehouse before the festival. The rest of the logical thinking remains unchanged.


With the words of yesterday.

Repeat the short-term steel logic:

The author has prospectively predicted that after 2 / 3 weeks this week, the total inventory of the five major varieties and rebar dropped to last year's peak of 25.3 million tons, 13.6 million tons or so is a high probability event! What about the shutter?! First, the corresponding inventory peak last year, rebar prices of about 3700 yuan / ton, now take Shanghai three brands as an example less than 3400 yuan / ton, Hangzhou first-class brand about 3500 yuan / ton. When the inventory drops to this level, is the steel price reasonable? How much room to fall?! Second, at the peak of inventory last year, can demand be compared with the return period of demand after May?! Third, since the Qingming Festival, the author repeatedly mentioned that the demand return period, daily trading volume regardless of whether or not to store speculative demand components, have reached the peak season state! The return period of demand should not be blasphemed! Fourth, the author has predicted the Qingming Festival after the steel price Xiao Yangchun, is based on the fundamentals have quietly improved judgment! The reason why only small Yangchun rather than Dayangchun, but absolutely high inventory suppression. But do not misread, the current high inventory is the driving force of decline, today's high inventory can only be understood as the main factor to suppress the rebound. In short, the author's point of view of trend prediction will remain unchanged, and the steel price market is ready to start in May! An outbreak is expected in June! The target position of the main contract of RB2010 is temporarily seen at 3610. If the inflection point of the epidemic beans of the United States arrives in the middle of May, the probability of 3750 is high.

Note: the author is not pessimistic about the current crude oil price!

2. Iron ore. Medium-term point of view remains unchanged, short-term May Day before the need for replenishment and capital manipulation disturbance, there is no trend market. Tactically, we should pay attention to the manipulation of funds, and it should be a better option for mines to follow the mood of funds! Timely stop profit stop is the hard core!

In a hurry to report the plague Jun Zeng crude oil, tears fly to make torrential rain.

Stone does not know the death of the country hate, across the shore still sing after the T flower.

East China Sea seats for which, only a huge gamble gap to fill.

Wu Gang Yingxing species epidemic beans, Chang'e Jingdong express beans.

Old God helps build inventory, the United States gives priority to practice.

A long way of good reincarnation, the vast sky spared who.


With yesterday's words.

1. Steel.

Short-term logic: first, crude oil avalanche. Second, scrap prices continue to rise independent arc furnace capacity expansion and long-process production limited expansion. Third, weather factors cause demand to look back. Fourth, there is no pre-festival inventory replenishment proposition for high inventory pressure and May Day five-day holiday. The author prospectively deduces that the driving force of steel prices falling from late April to early May is being realized. No, no. In the short term, it is expected that the probability of destocking will slow down 2-3 weeks later this week, and the probability of total inventory of the five major varieties and rebar will drop to last year's peak at the time of non-epidemic after the first ten days of May. Only then do you have the driving force for a sustained rebound.

2. Raw material end.

It is difficult to sustain the continued rise in scrap prices.

Bifocal prices continue to have limited downside space.

Diamond iron ore is mainly the manipulation of funds to tell stories, to tell the story of the supply reduction of the epidemic king …. No, no. The short-term target position is about 575. What about the shutter?! For crude oil, did the epidemic not stop its supply reduction? Why did it fall to minus $41 a barrel? In the medium term, the impact of the essential epidemic on its demand reduction is far greater than the impact of supply. No, no. Medium-term normal how to fall personally think is reasonable! In short, in the medium term, the author's point of view remains unchanged.



1. 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.

2. 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.


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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