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[SMM issue current Daily Review] curl autumn wind, Dongting wave Xi wood leaves!
Apr 28,2020 19:35CST
The content below was translated by Tencent automatically for reference.

(28 April)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / severe / 1038 1659 997 persons.

Overseas epidemic situation: new cases / confirmed cumulative cases / deaths / 69612 / > 2.922 million / 207582.

The first square array of the United States: confirmed cumulative cases / deaths / > 1.01 million / 56803. The author foolishly measured that the United States in May epidemic bean base > 2 "million tons" is a high probability event! Come on, old man!

Confirmed / increased / died in serious countries.

"Latin American countries." 160000.

UK: > 157000 / 4310 21092.

Russia: > 96000 / 6411 864.

Brazil: > 67000 / 4613 4603.

Canada: > 49000 / 1347 2841.

India: > 29500 / 1561 939.

Peru: > 28600 / 1182 782.

Singapore: > 14900 / 528.


< 2 > current playback:

1. Today's spot market prices: up and down mixed, the overall weak and stable; South China Guangzhou, East China Hangzhou, Shanghai fell 10-20 yuan / ton, individual regions such as Xi'an rose 10-20 yuan / ton.

Trading volume remained strong.

The market mentality is pessimistic, cautious and positive.

The billet in Tangshan area has jumped from 10 to 3080 yuan per ton since the weekend.

Raw material end:

Scrap prices continued to rise in some areas.

The price of coke held steady.

The price of imported coking coal continued to fall.

Iron ore market prices fell 5-10 yuan yesterday: Shandong PB price 640 yuan / ton transaction, Tangshan PBpowder in 650 yuan / ton transaction, trading weak; most areas of steel mills still purchase on demand, the willingness to chase further weakened; in the afternoon, some businesses are willing to offer weaker.

2. Futures: affected by pre-festival insurance, another collapse in crude oil and customs data in March (4.3702 million tons of coking coal imported from Australian kangaroos, an increase of 9.39% over the previous month and a sharp increase of 96.36% over the same period last year), the black system washed and cut leeks!

RB2010 main contract: a sharp fall in the day between 3333 and 3276, ending at 3292.

HC2010 main contract: a sharp fall in the day between 3183 and 3125, ending at 3149.

Iron ore i2009 main contract: a sharp concussion between 606.5 and 592 for the day, ending at 594.5.

Coke J2009 main contract: within the day between 1699.5 and 1636, the end of 1638.5.

Coking coal JM2009 main contract: within the day between 1071 and 1028, the end of 1035.5.

Forecast of the current period of the Ming Dynasty

1. Spot aspect: small shock, stable mainly.

2. Futures:

RB2010 main contract: concussion between 3270 and 3380.

HC2010 main contract: concussion between 3110 and 3200.

I2009 main contract: concussion between 590 and 615.

J2009 main contract: concussion between 1610 and 1690.

JM2009 main contract: concussion between 1000 and 1080.

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: at low altitude only profit leaves the field, activists a small number of single intervention.

Coke: trading is neutral in the short range.

Coking coal: at low altitude, only profit leaves the field, activists are more than a small number of single intervention.

Timely stop profit stop is a hard road.

RB2010 main force contract: support level 3270, 3250, pressure level 3350.

HC2010 main contract: support level 3110, pressure level 3200.

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

J2009 main contract: support level 1610, pressure level 1700.

JM2005 main force contract: support level 1000, pressure level 1080.

< IV > Information and heart language.

1. Institute of Financial and Strategic Studies, Academy of Social Sciences: in March, the combined house price in 24 core cities across the country exceeded the level before the Spring Festival in 2020, and also higher than the highest price for the whole of 2019, but lower than the price level in mid-2018.

2. [BHP Billiton hopes to increase its iron ore export capacity by 14 per cent to 330 million tonnes] BHP Billiton said recently that it would begin negotiations on the possibility of increasing iron ore exports. The company hopes to increase its Australian iron ore export capacity by 14 per cent, in a sign of its return to significant growth ambitions. It is understood that BHP Billiton is currently allowed to export 290 million tons of iron ore a year from Port Hedland in Western Australia. If market conditions permit, it hopes to eventually raise this limit to 330 million tons. If the company meets its fiscal 2020 export target of 273 million to 286 million tons, it will set a new record. At present, the plan is in a very preliminary stage and a lengthy approval process. To get approval from Western Australian regulators, BHP Billiton will need to convince local communities near Port Hedland that it can control dust pollution from the port. BHP Billiton said on Tuesday (April 28) that it would invest $300m in dustproof projects at Port Hedland.

3. 14 MTR ore shipments (4 20-4 26): last week, Australia and Brazil shipped 22.989 million tons of iron ore, down 286000 tons from the previous period, 18.508 million tons from Australia, an increase of 1.477 million tons from the previous month, and 15.25 million tons from Australia to China, an increase of 335000 tons over the previous week. Rio Tinto sent 6.209 million tons to China, down 346000 tons from last week, 5.131 million tons of BHP to China, 426000 tons more than last week, and 3.16 million tons of FMG to China, 6000 tons more than last week. Brazilian shipments totaled 4.481 million tons, down 1.763 million tons from the previous period, with Vale shipments of 3.767 million tons, 1.425 million tons less than the previous month, and CSN shipments of 368000 tons, 249000 tons less than the previous month.

19 MTR ore shipments (4 20-4): last week, Australia and Brazil shipped a total of 24.05 million tons of iron ore, a decrease of 2.028 million tons from the previous period. Australia's shipments totaled 19.226 million tons, an increase of 258000 tons over the previous month, while Brazil's shipments totaled 4.824 million tons, a decrease of 2.286 million tons over the previous month.

Note: 5 new shipping ports and 4 mines have been added to the caliber traffic data. The ports are Australia KWINANA, CAPE PRESTON, WHYALLA, Brazil PECEM, PORTO DO ACU, mines RoyHill, CITIC PACIFIC, SIMEC, MINAS RIO (ANGLO AMERCIAN)

Global iron ore shipments (4 20-4): last week, new caliber global shipments totaled 28.51 million tons, down 2.195 million tons from the previous month;

4. According to SMM tracking data, a total of 71 ships arrived at China's main ports from 4.19 to April 25, with an estimated arrival volume of 11.21 million tons, down 820000 tons from the previous period and 2.47 million tons from the same period last year. During the period, Australian outbound exports continued to increase by 1.24 million tons to 18.83 million tons, an increase of about 1.88 million tons over the same period last year. Brazilian exports fell 1.02 million tons to 5.22 million tons from the same period last year, an increase of 1.14 million tons over the same period last year. [SMM Steel]

5. Scrap prices continue to rise, independent electric arc furnace and long-term fluidic supply continue to expand, only from the data of each network, the operating rate of electric arc furnace is about 63%, and the operating rate of blast furnace is less than 81%. But the author's research data is much higher than this value! In short, the supply-side phase (the second half of the year is another matter) is at its peak.

May, June demand side should be safe, short position do not be too proud! Looking at the daily trading volume to know that the return period of demand is even more due, the main contribution should be infrastructure, real estate at least stock demand resilience and rush demand drive is still on the way. No, no.

Although the inventory pressure still exists, but as the author predicts, the probability of falling to the peak platform in previous years by the first ten days of May, taking into account that the current price has fully reflected the factors of high inventory. In short, the boundary time where to continue to fall driving force.

In short, the author's point of view remains unchanged: from late April to May to save another fall driving force, but May has the conditions to prepare for development!

6. Iron ore prices medium-term pressure point of view remains unchanged, short-term prices fluctuate with rebar, the original short-term target position 575 is still unchanged, but based on the May Day holiday peripheral uncertainty, it is suggested that empty and low earnings leave the field, activists can meet the right amount of bargain and single intervention to follow the rebound of rebar after Bojie. Coke prices remain unchanged, short-term prices still do not have a trend market! Although the price of coking coal is under pressure, excessive shorting is not recommended.


With yesterday's words.

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).

Inventories may now vary widely depending on the statistical sample:

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!


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