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[SMM Daily Review] the global economy restarts to boost the market, non-ferrous steel continues to fall, the pool of ferrous metals rises.
May 7,2020 16:55CST
translation
Source:SMM
Recently, in view of the inflection point in the growth rate of the epidemic, many countries in Europe and the United States have strengthened policy stimulus and intend to restart economic activities, superimposed with the help of a rebound in crude oil prices, and commodity markets have generally rebounded. However, due to the uncertainty of the epidemic and political mediation, there are still downside risks in the later stage.
The content below was translated by Tencent automatically for reference.

SMM5, March 7: recently, in view of the inflection point in epidemic growth, many countries in Europe and the United States have strengthened their policy stimulus efforts and intend to restart economic activities, superimposed on the help of a rebound in crude oil prices, and commodity markets have generally recovered. However, due to the uncertainty of the epidemic and political mediation, there are still downside risks in the later stage. China exported 441177.1 tons of unwrought aluminum and aluminum products in April 2020, down 15 per cent from March, according to data released today by the General Administration of Customs. As far as the feedback of downstream aluminum processing enterprises is concerned, the overall feedback export orders of leading enterprises in each plate industry have declined significantly in the past two months, and it is expected that there will be a significant recovery in the whole second quarter, and the export data of unwrought aluminum and aluminum products in May are hardly optimistic. Shanghai zinc rose 1.28% to a multi-month high. From the smelting end, due to the impact of imported ore, domestic ore purchase difficulties, some smelters will be overhauled in May-June, it is expected that the market supply side pressure in June significantly weakened, further driving up zinc prices. SMM believes that the short-term zinc price is on the strong side, pay attention to the pressure at the Wanqi pass, and be vigilant that the reduction of production at the end of the world is limited by superimposed transportation or aggravate the shortage of raw materials in domestic smelters.

The black series continued to rise today, with iron ore hot rolls up 1.9% and threads up 1.5%. The additional superimposed loose monetary environment of special debt still has a great support to the domestic construction demand. And steel spot transactions are active, supply and demand double increase in the case of inventory to maintain demineralization, steel fundamentals also continue to improve. It is expected that steel prices will be volatile in the short term, but in the long run, the domestic and foreign economies are still in a downward trend, foreign trade is still affected to a certain extent and the seasonal off-season is coming, and the long-term steel market is still waiting to be seen. The latest incoming volume of iron ore is expected to be 12.84 million tons, an increase of 1.63 million tons over the previous month. With the recent shipments in Australia and Brazil continue to pick up superimposed Tangshan steel production restrictions and other factors, supply-side pressure is expected to become more prominent, or will suppress the price of raw materials to ensure the profitability of steel.

Crude oil fell 0.68% in the previous period. International crude oil futures widened their decline on Thursday as the crude oil industry struggled as the global supply glut intensified and demand plummeted as a result of the epidemic. Changes in sentiment boosted oil prices earlier this week, but the surplus of physical goods will not be eliminated in the short term. Brent crude oil futures fell 22 cents, or 0.74 percent, to $29.50 a barrel. The contract fell 4% on Wednesday. Us crude oil futures fell $0.05, or 0.21 per cent, to $23.94 a barrel, down more than 2 per cent yesterday.

As of today's daytime close:

As of 16:10, the new US dollar denominated small metals contracts on the HKEx are as follows:

Today's capital flow

In terms of capital flow, due to the impact of May Day holiday wind control measures, most varieties increased margin, and the proportion of margin returned to normal after the festival, so when Mandarin commodities increased their positions by 840000 hands within a day, the capital flowed out 16.5 billion yuan, including 11.3 billion yuan for industrial products and 5.2 billion yuan for agricultural products.

Brief comment of SMM analyst on May 7

Copper: today, the main force of copper in Shanghai opened at 42730 yuan / ton in the morning. After the opening, the market rose slightly to 42820 yuan / ton, and then the bears entered the market one after another to reduce their positions, and the copper price fluctuated to the lowest point of 42670 yuan / ton in the day. At this time, the short sky on the low left the market to drive the copper price to rebound, recover all the decline in the day, once again explore 42820 yuan / ton. Copper prices fell slightly to close at 42760 yuan / ton before the close of trading. Open in the afternoon, continuous short reduction operations all the way to push up copper prices. Near the end of the day, copper prices quickly broke through the 43000 yuan / ton mark, and finally closed at 43110 yuan / ton, up 550yuan / ton, an increase of 1.29%. Today, the main force of Shanghai Copper increased its daily positions by 1784 to 114000, mainly by bulls, while trading volume increased by 13000 to 74000. Shanghai Copper 2005 contract continued to reduce positions, intraday reduction of 2580 hands to 36000 hands, mainly for short positions. Today, China's April import and export data are released, April's trade account far exceeded expectations, and exports unexpectedly increased sharply. In the afternoon, the General Administration of Customs announced that China imported 461500 tons of unwrought copper and copper materials in April, and 2.029 million tons of copper ore and its concentrate in April, an increase compared with the same period last year. The higher-than-expected import and export data strengthened the market's optimistic expectation that China's economy would continue to improve. In the context of the lack of relief in copper supply, the sustained recovery in copper demand supported the upward trend in copper prices. The overall macro atmosphere is also optimistic, providing some momentum for the rise in copper prices. Today, Shanghai copper closing Yang, has broken through the 60 moving average, and KDJ opening continues to expand, the technical side to see a good copper price. Wait for the outer disk guidelines at night to test whether Shanghai Copper can stand firm at the 43000 yuan / ton mark.

Zinc: intraday Shanghai zinc main force 2007 contract opened at 16605 yuan / ton, intraday long-short game stalemate, Shanghai zinc around the daily average line near 16590 yuan / ton narrow fluctuation, up and down amplitude less than 50 yuan / ton, afternoon two night session highs ended in failure, closed up 16615 yuan / ton, up 230 yuan / ton, up 1.4%, trading volume increased 46908 hands to 103000 hands, position increased 8492 hands to 104000 hands. Lun Zinc close short shadow positive column, stand firm all averages, import ore inflow supplement blocked further fermentation, transformed into smelter production pressure, supply side good did not cool down, at the same time, the global economic restart brought good mood, the current zinc bearish risk is greater, zinc is still expected to have upward power.

Updating.

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