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[SMM issue current Daily Review] Feng Jing qu Tangxia, stable release of the boat.
Apr 27,2020 18:39CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(27 April)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: imported cases / asymptomatic / severe / 1636 974 people.

On the 26th, the National Health Commission (NHS) reported 11 new confirmed cases in 31 provinces on the 25th, of which 5 were imported cases from abroad and 6 were local cases (5 in Heilongjiang and 1 in Guangdong). There were 30 cases of asymptomatic infection (19 cases in Hubei). Wuhan in hospital new crown pneumonia patients clear zero!

Overseas epidemic situation: new cases / confirmed cumulative cases / deaths / 74454 / > 2.922 million / 202706.

The first square array of the United States: confirmed cumulative cases / deaths / > 987000 / 55415.

Confirmed / increased / died in serious countries.

United Kingdom: > 154000 / 4463 20794

Russia: > 87000 / 6198 794

Brazil: > 63000 / 2692 4286

Canada: > 47000 / 1290 2663

India: > 27000 / 1607 887

Peru: > 27000 / 2186 728.

 

< 2 > current playback:

1. Weekend to date spot market prices: the overall stable, up and down 10-20 yuan / ton jump; East China Hangzhou, Shanghai strong operation, the weekend has actually risen 10 yuan / ton.

Strong trading volume: want to put the West Lake than Xizi!

The market mentality is cautious and positive.

The billet in Tangshan area has gone up by 20 to 3090 yuan per ton since the weekend.

Raw material end:

The price of scrap steel is falling steadily.

The price of coke is stable.

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

The iron ore market fell slightly from last Friday's overall price: Shandong PB prices were 645-650 yuan / ton, and Tangshan PBpowder was 650 yuan / ton. In general, most steel mills in most areas still purchase on demand, further weakening their willingness to catch up, and some steel mills in East China and North China have pre-storage replenishment demand.

2. Futures:

RB2010 main contract: weak concussion between 3359 and 3309 during the day, ending at 3316.

HC2010 main contract: weak concussion between 3199 and 3162 during the day, ending at 3171.

Iron ore i2009 main contract: weak concussion between 611.5 and 600.5 during the day, ending with 602.

Coke J2009 main contract: weak concussion between 1713 and 1696 during the day, ending at 1701.5.

Coking coal JM2009 main contract: within the day between 1092.5 and 1074 concussion downward, the end of 1075.

 

Forecast of the current period of the Ming Dynasty

1. Spot aspect: small shock, early weak afternoon strong.

2. Futures:

RB2010 main contract: concussion between 3280 and 3390.

 

HC2010 main contract: concussion between 3130 and 3250.

I2009 main contract: concussion between 590 and 615.

J2009 main contract: concussion between 1680 and 1750.

JM2009 main contract: concussion between 1060 and 1100.

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 of the single gradually bargain intervention, short-term range of high throwing and low suction rolling operation.

Iron ore: short range short trading.

Coke: trading is neutral in the short range.

Coking coal: short-term trading.

Timely stop profit stop is a hard road.

RB2010 main force contract: support level 3300, 3270.

HC2010 main force contract: support level 3150, 3110.

I2009 main contract: support level 594, pressure level 615.

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

JM2005 main force contract: support level 1060, pressure level 1100.

 

< IV > Information and heart language.

1. Sheng Laiyun, deputy director of the Bureau of Statistics: although the impact of the epidemic is huge, it has not hurt the bones and bones, hurt the productivity fundamentally. In the face of economic downward pressure and unprecedented external shocks, we must strengthen policy hedging, make positive fiscal policies more positive and promising, prudent monetary policies more flexible and moderate, enhance the joint force of macro policies, and do a solid job in the "six stable" work. Expand effective demand, smooth economic cycle, and promote the smooth operation of the economy.

2. [Academy of Social Sciences: housing prices in Guangdong, Hong Kong and Macao Bay area have risen structurally, and prices in other major urban agglomerations are rising slightly] the Housing Big data Project Group of the Institute of Financial and Strategic Studies of the Academy of Social Sciences today released the "China Housing Big data Analysis report" in April. The report shows that since March, housing prices in the Greater Bay area, including Shenzhen, have taken the lead in a structural rapid rise, but there has been no regional real estate boom. In the other two urban agglomerations in China, the housing prices in the core cities around the Bohai Sea and the Yangtze River Delta are rising at a reasonable rate in the near future. In general, house prices and transactions in most cities have basically recovered after the impact of the epidemic, house prices have generally stabilized slightly, and there has been no market recession. According to SMM, the data show that house prices in major urban agglomerations have been strong after the epidemic. According to SMM research, housing construction projects in North China, East China and South China have also basically resumed operations. In the later stage, these areas are expected to resume full work more quickly, and there is a relatively higher demand for rush work. [SMM Steel]

3. Notice of transactions during Labour Day 2020:

(1) Trading time adjustment: closed from May 1, 2020 (Friday) to May 5, 2020 (next Tuesday), May 6, 2020 (next Wednesday) 8: 55-9: 00 all futures and options collective bidding, resume trading, and resume night trading that night;

(2) Adjustment of the range of ups and downs and margin standards of the relevant varieties: if there is no unilateral market on April 29, 2020 (this Wednesday), from the closing time of the same day:

The limit range of thread (RB) is adjusted from 7% to 9%, and the margin standard is adjusted from 9% to 11%.

Hot coil (HC) rise and fall limit range from 7% to 9%, margin standard from 9% to 11%;

The limit of iron ore (I) rise and fall is adjusted from 7% to 8%, and the margin standard is adjusted from 8% to 9%.

The range of coke (J) is adjusted from 7% to 8%, and the margin standard is adjusted from 8% to 9%.

The range of (JM) rise and fall limit of coking coal was adjusted from 7% to 8%, and the margin standard was adjusted from 8% to 9%.

The range of the limit of rubber (RU) was adjusted from 9% to 11%, and the margin standard was adjusted from 11% to 13%.

The limit range of 20 # glue (NR) was adjusted from 9% to 11%, and the margin standard was adjusted from 11% to 13%.

(3) after the resumption of trading on May 6, 2020 (next Wednesday), if the relevant futures varieties do not rise or fall in the unilateral market, except coke, coking coal and iron ore continue to maintain the range of trading margin during the holiday period and trading margin level unchanged, the rest of the varieties will be transferred back to the normal level at the time of settlement on the same day.

4. Last week, import stocks at 45 ports were 115.85 million tons, down 500000 tons from the previous week, and the average daily volume of port opening increased by 1.55 to 3.057 million tons. It is only a matter of time before steel mills in Japan, South Korea and other countries reduce production, and shipments of Australian kangaroos and Brazil increase sharply to China.

5. Although the inventory data is the result of the relationship between supply and demand or the appearance of static price, there is no inevitable logic of one-to-one correspondence between static inventory and price. However, there is no doubt that static inventory data is still one of the important basic indicators of supply and demand in the later stage of the study, so it is necessary to review the comparison between last year's inventory peak / corresponding steel prices and current inventory data / corresponding prices.

Peak inventory data for 2019 / corresponding steel prices compared with inventory data / corresponding steel prices for 23 April 2020:

On March 1, 2019, the total inventory peak of the five major varieties was 29.69 million tons (of which the social bank was 23.66 million tons), and the total rebar inventory was 18.07 million tons (of which the social bank was 14.66 million tons). The corresponding steel prices were 3850 yuan / ton and 3820 yuan / ton for Hangzhou Shagang brand (the same below).

Now inventory may vary greatly depending on the statistical sample, but look at the Steel Union data on April 23, 2020 and My steel data:

The total inventory of the five major varieties is 28.29 million tons (including 20.13 million tons of social bank), and the total inventory of rebar is 15.12 million tons (10.78 million tons of social bank).

The total inventory of five varieties and rebar is 3275 tons and 19.57 million tons respectively.

The corresponding steel price Hangzhou Shagang 3520 yuan / ton right, Shanghai 3450 yuan / ton left.

I would like to ask the rolling curtain people, steel prices have a sharp decline in the driving force?!

6. At present, there is the voice of the so-called peak demand in the market, the author does not agree with the main logic: first, the counter-cyclical regulation of demand has just set sail. No, no. Second, although the real estate start rate fell sharply, but relative to the decline in GDP, it is not too sad, we should see a huge base, now the resumption of production is basically in place, why worry about a start on the brakes! As for the financial pressure of some small housing enterprises is an objective fact, but also is not the universality of the contradiction. Third, although the impact of regional demand is different, such as Hubei and Northeast China. However, as soon as the time dimension is elongated, the degree of convergence is naturally high. Fourth, part of the demand for rush work is already on the way. No, no. Fifth, the epidemic situation in Europe is gradually improving, and the most pessimistic trade between China and the EU is about to pass. In short, the demand return period is more beyond doubt!

7. The rest of the logical thinking remains unchanged and does not repeat.

 

Enclosed are the words of Zhou Xin.

Present logic deduction.

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.

< 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!

 

[arbitrage training] Black experts impart practical experience to Scientific Trading to achieve profit growth https://news.smm.cn/news/101063159

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