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[SMM issue current Daily Review] safe Jinyi dreams tonight, Yueming good cross the rivers and lakes.
Apr 24,2020 19:04CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(24 April)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: imported cases / asymptomatic / severe / 1618 979 people.

Zhang Boli, academician of the Chinese Academy of Engineering: it is difficult for the new crown pneumonia epidemic to stop as abruptly as SARS. A second wave is expected this autumn and winter. The new crown pneumonia epidemic will not stop in the next one to two years, but the vaccine is expected to come out in a year or two and can be gradually brought under control after a universal vaccine. After most people develop antibodies, New Crown pneumonia can be called a normal disease that coexists with humans.

Overseas epidemic situation: new cases / confirmed cumulative cases / deaths / 80414 / > 2.647 million / 186622.

Epidemic situation in Europe and the United States:

The first square array of the United States: new cases / confirmed cumulative cases / deaths / 27457 / > 886000 / 50243.

Europe: the second square (confirmed / (new) / dead).

United Kingdom (> 139000 / (1168) / 18791), Italy (> 189900 / (2646) / 25549), Spain (> 213000 / 22157), France (> 159000 / 127721889),

Germany (> 15.3 2481 5575).

Third Square Array (1700000):

Russia (> 62000), Belgium (> 42700), Netherlands (> 35700), Portugal (> 22300), Ireland (> 17600), Switzerland (> 28400), Sweden (> 16000), Poland (> 10500), Austria (> 42700), Romania (> 10, 000).

The rest of the region:

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 (> 101700), Iran (> 87000), Brazil (> 87000), Canada (> 43200), India (> 23500), Peru (> 2.09), Ecuador (11183), Israel (> 14800), Saudi Arabia (13930), Chile (1.12), Japan (> 12400), Chile (> 11800), Mexico (> 11600), Pakistan (> 11100), Australian kangaroo (6675), Malaysia (5603), Indonesia (7775), Singapore (11178), South Africa (3953), Philippines (6981).

 

< 2 > current playback:

Spot market prices were generally volatile and downward this week, down 10-60 yuan / ton. The overall trading volume is good.

1. Today's spot market price: the overall stable, strong trading volume.

The market mentality is cautious and positive.

The billet in Tangshan area jumps from 20 to 3070 yuan per ton.

Raw material end:

The price of scrap steel has risen in part.

The price of coke is stable.

The price of imported coking coal continues to come under pressure.

Iron ore market: prices are weak and stable, but trading activity is low. The price of PB in Shandong is 645-650 yuan / ton, and that of Tangshan PBpowder is 655-660 yuan / ton. The expectation of replenishing inventory before the market festival has weakened.

2. Futures:

RB2010 main contract: strong concussion between 3318 and 3348 during the day, ending at 3343.

HC2010 main contract: strong concussion between 3198 and 3161 during the day, ending at 3187.

Iron ore i2009 main contract: strong concussion between 602.5 and 613 during the day, ending with 607.

Coke J2009 main contract: within the day in 1677.5 to 1717 between the strong shock, the end of 1715.

Coking coal JM2009 main contract: within the day between 1086 and 1103.5 concussion downward, the end of 1093.

 

< 3 > current forecast for next week

1. Spot: small shock, price center of gravity stable.

2. Futures:

RB2010 main contract: concussion between 3300 and 3450.

HC2010 main contract: concussion between 3150 and 3290.

I2009 main contract: concussion between 590 and 615.

J2009 main contract: concussion between 1680 and 1750.

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: it is appropriate to participate in light positions before the festival.

Thread, hot coil: in the middle of most single gradually bargain intervention.

Iron ore: it is suitable for rolling operation of high throwing and low absorption in the range.

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

Coking coal: it is appropriate to trade short in the range.

Timely stop profit stop is a hard road.

RB2010 main contract: support level 3300.

HC2010 main contract: support level 3150.

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

J2009 main contract: support level 1670, pressure level 1730.

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

 

< IV > Information and heart language.

1. As of April 24, iron ore stocks in 35 ports were 107.6 million tons, down 540000 tons from the previous week and 17.86 million tons from the same period last year. The volume of dredging on Sunday rose slightly from the previous week by 33000 tons to 2.782 million tons. Recently, the arrival of iron ore in Tangshan area has decreased, while the number of sparse ports has increased, resulting in a month-on-month decline in inventory between the two ports. The inventory of the main ports in Shandong also shows a month-on-month downward trend. On the one hand, the recent arrival of iron ore in Shandong is on the low side, on the other hand, the iron ore demand of steel enterprises around the radiation of Shandong main port is just high, and near May Day short holiday, some steel enterprises have more inventory plans to increase the average daily port volume of the port. Considering that the replenishment may continue next Friday, the average daily opening volume of iron ore ports may still be expected to increase month-on-month. [SMM Steel]

2. Xinhua she: has done a solid job in the work of "six guarantees" and implemented the task of "six guarantees." Manufacturing is the lifeblood of the national economy. Large state-owned enterprises should play the role of the main force and, on the premise of doing a good job in the prevention and control of the regular epidemic situation, drive upstream and downstream industries and small and medium-sized enterprises to resume work in an all-round way. We will strengthen and optimize the real economy, especially the manufacturing industry, promote investment in new infrastructure projects such as 5G, the Internet of things, artificial intelligence, and the industrial Internet, increase investment in transportation, water conservancy, energy, and other fields, make up for the shortcomings of rural infrastructure and public services, and strive to solve the problem of unbalanced development.

3. Futures resume night trading information.

Shanghai Futures Exchange:

Dalian Commodity Exchange:

Zhengzhou Commodity Exchange:

All tentatively scheduled to resume night trading on Wednesday, May 6, 2020 after May Day.

4. Logical deduction for the next cycle.

The end of the material: first, the so-called pre-festival inventory market expectations are difficult to achieve, only the absolute value of inventory is still high! Second, the strong intensity of demand is not as strong as the early stage, profit-driven independent electric arc furnace and blast furnace operating rate continue to expand. Third, the "two sessions" will be held soon, Tangshan area environmental protection production restrictions have the probability of thunderstorms! However, the so-called market expectations of good policies, new bottles of old wine (new and old infrastructure early landing), good policies have no shortage (counter-cyclical adjustment on the road. ), it will not change much, the key is that hedging the economic downturn takes time, and it is impossible to collapse the reality in one fell swoop. Fourth, the futures insurance before the festival, the shock range will be increased, but the author believes that the overall center of gravity up is a large probability event. Fifth, the author has analyzed the inventory data changes: although the deinventory continues, but the month-on-month probability will further slow down, from last year's peak still needs 1.2 weeks. Sixth, the "equivalent" steel price is underestimated, that is, if the post-season inventory peak is comparable to last year's peak, how much is the difference between the current steel price and last year's steel price? Seventh, there is no doubt about the return period of demand after the festival. The market is so-called worried about the Meiyu season for the ancients. Do you know that most of the major construction materials are in the tent house at present, the impact is negligible! In short, the author's forward-looking deduction remains unchanged, and steel prices are ready to start in May. When it comes to bargain absorption, we don't wait for us.

Raw material end.

Scrap prices based on demand and limited resources, prices are easy to rise but not fall.

Coke aspect: the coke enterprise rises sonorously forcefully, Shanxi direction eliminates 4.3 meters coke oven may have some rain, the steel mill inventory relative bottom level, the average usable days 16 days. It is expected that with the expansion of steel mill profits, the first round will increase the probability of landing.

Coking coal stocks are still accumulating and short-term price pressures remain the same.

Iron ore: in the short term, the overall level of supply and demand on domestic fundamentals is not as good as manipulating funds to tell stories, and the probability of replenishing inventory before the festival is weakened, only by the "diamond price."

In the medium term:

At present, there is no problem with the outbreak of kangaroos in Australia. Brazil is objectively more serious, but foreign steel mills are still on their way to reduce production. The impact of demand reduction is greater than that of supply reduction, only because it is known that compradors copy selectively. In a word, in the short term, the author predicts that the probability of falling before the section and following the thread after the section is high.

 

Enclosed are the weekly 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. Market storage before May Day inventory expectations, the author does not agree, the market inventory is still good-looking, 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 from the peak of the impact of the epidemic. What is the driving force for a sharp rebound?

5. Deduced from the supply side, the raw material end of high demand for about 2 weeks, iron ore long story can be told for how long. Huh? 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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