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[SMM current Daily Review] Nine words to wake up the price of fans to rise, a quantity to wake up the dreamer.
May 7,2020 18:53CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(7 May)

< 1 > in terms of epidemic situation.

1. Meeting of the standing Committee of the political Bureau of the CPC Central Committee: at present, the spread of the epidemic outside the country has not been effectively curbed, and there is still a great deal of uncertainty about the outbreak of Xinguan pneumonia in some parts of the country.

2. Zhang Wenhong: according to the current schedule of phase III clinical studies and the schedule of phase II clinical studies in China, the earliest vaccine results in the world should be released by the end of this year or early January next year. If all the data are ideal and can declare the approval of the US FDA or China's CFDA, it should be between March and June next year.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / severe / 4881680 / 880 persons.

Overseas epidemic situation: new / confirmed cumulative cases / deaths / 91676 / > 3.75 million / 260674.

Overwhelming priority in the United States: new / confirmed cumulative cases / deaths / 19006 / > 1.263 million / 74809.

International sharp mirror: when something happens to the United States, there must be a demon. Politicians shake the pot, stigma as a matter of business, grass mustard human life is inhumane.

Serious countries and regions.

UK: > 201100 / 6111 30076.

Russia: > 177000 / 11231 1625.

Brazil: > 126600 / 10503 8588.

India: > 53000 / 3587 1787.

Peru: > 54800 / 3628 1533.

Canada: > 6.34 1357 4232.

Singapore: > 20900 / 741.

< 2 > current playback:

1. The spot market price of steel continues to rise generally: an increase of 10 yuan and 60 yuan per ton. Wuhan in central China rose 50 yuan, Guangzhou in South China rose 40 yuan 60 yuan / ton, and Shanghai and Hangzhou in East China rose 30 yuan. The hot coil is also stronger than the rebar, and the cold rolled material is up 50 to 70 yuan today.

Trading volume is less than yesterday's volume, but it is still strong.

Market mentality: the early late enlightenment bears the short gradually turns to be more.

Tangshan area billet upward 10 to 3130 yuan / ton.

Raw material end:

The price of scrap continues to rise.

Coke price on the strong side of the operation: the first round up 50 yuan / ton steel mills have been accepted. Shanxi, Hebei steel mills after Shandong accepted the first round of increase of 50 yuan / ton.

The price of coking coal is stable.

Iron ore port spot market stable small rise: Shandong direction PB powder mine 655 yuan / ton has a transaction, Tangshan area 665 has a deal. Activity is weak, traders offer actively, steel mills purchase on demand.

2. Futures:

RB2010 main contract: break through 3435.

A huge increase in positions between 3394 and 3443 continued to rebound during the day, ending at 3439.

HC2010 main contract: break through 3290.

The day continued to rebound between 3241 and 3306, ending at 3305.

Iron ore i2009 main contract: within the day in 609 to 623 between a huge increase in positions rebounded, ending at 623.

Coke J2009 main contract: a significant increase in positions between 1708.5 and 1748 within the day continued to rebound, ending at 1741.

Coking coal JM2009 main contract: within the day in 1083.5 to 1100.5 between the strong shock, the end of 1088.5.

< 3 > current forecast for tomorrow

1. Spot: strong operation.

2. Futures:

RB2010 main contract: concussion between 3400 and 3470.

HC2010 main contract: concussion between 3280 and 3340.

I2009 main contract: concussion between 615 and 635.

J2009 main contract: concussion between 1690 and 1760.

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 late consciousness can still replenish the inventory in appropriate amount.

Thread, hot coil: the previous low multi-single hold, the new single range of high throw low suction rolling operation.

Iron ore: high altitude and low trading in the range.

Coke: more trading in the range.

Coking coal: trading within the range is mainly neutral.

RB2010 main contract: support level 3380.

HC2010 main contract: support level 3290.

I2009 main contract: support level 618, pressure level 635.

J2009 main contract: support level 1690, pressure level 1760.

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

< IV > Information and heart language.

1. Executive meeting of the State Council: it is necessary to do a good job of the "six guarantees" as the focus of the "six stability" work and stabilize the basic economic market. We will implement the strategy of expanding domestic demand and take measures to promote the recovery of consumption at the same time. Small and micro enterprises and individual industrial and commercial households are allowed to postpone the payment of income tax and extend the implementation period of tax and fee policies related to supporting epidemic prevention and control. On the basis of the 1.29 trillion yuan of local government special bonds issued at the beginning of the year, the new quota of 1 trillion yuan of special bonds has been issued in advance in accordance with the procedures, with a view to completing the issuance by the end of May.

2. Us: ADP employment fell by 20.236 million in April, compared with a previous decline of 27000. Unemployment on this scale is unprecedented. The total number of unemployed in April alone was more than twice the total during the Great Depression.

3. Hegang Group raised the purchase price of coke by 50 yuan / ton, and the adjusted primary coke (A ≤ 12.5, S ≤ 0.65, CSR ≥ 65, MT ≤ 7) was quoted at 1900 yuan / ton; medium sulfur coke (A ≤ 13, S ≤ 1, CSR ≥ 60, MT ≤ 7) was quoted at 1700 yuan / ton; all of the above are accepted including tax prices on arrival at the factory, which will be implemented from May 8, 2020.

4. According to SMM tracking data, a total of 86 ships arrived at China's main ports from April 26 to 5.2, with an estimated arrival volume of 12.84 million tons, an increase of 1.63 million tons over the previous period and a decrease of 990000 tons compared with the same period last year. During the period, Australian outbound exports fell 1.15 million tons to 17.68 million tons, an increase of about 1.13 million tons over the same period last year. Although the number of Australian exports to China has dropped month-on-month, the proportion of shipments to China has increased to about 88% month-on-month, and the proportion of shipments to China has still increased slightly over the previous month. Brazilian exports increased by 870000 tons to 6.09 million tons over the same period last year, basically unchanged from the same period last year.

5. Sunrise interpretation of inventory data:

The total output of the five major varieties increased by 60100 tons to 10.27 million tons, of which the output of rebar increased by 104600 tons to 3.6898 million tons, and the output of hot rolling decreased by 74100 tons to 2.9383 million tons.

 

The total inventory of the five major varieties decreased by 1.0706 million tons to 25.1986 million tons, of which the total inventory of rebar fell by 741900 tons to 13.1714 million tons, and the total inventory of hot rolling decreased by 82200 tons to 4.4128 million tons.

Steel mill inventory: five major varieties fell by 412300 tons to 7.0935 million tons, rebar by 277400 tons to 3.6792 million tons, hot rolling by 11300 tons to 1.1565 million tons.

Social warehouse inventory: five major varieties fell by 658300 tons to 18.1051 million tons, rebar by 464500 tons to 9.4922 million tons, hot rolling by 70900 tons to 3.2563 million tons.

See Table 1 for details.

Interpretation: this sunrise of inventory data is generally in line with the author and market expectations.

The main results are as follows: (1) the yield of five major varieties increased slightly, supporting the forward-looking prediction of limited supply-side expansion. The rebar is subject to the sharp rise in scrap prices and limited resources: the output of independent electric arc furnace is now at a high level compared with the same period last year, the probability of small fluctuation in the later stage, and the operation rate of blast furnace is also close to the high level of last year, and the increment in the later stage is very limited. In the early stage of hot rolling, the output was greatly reduced due to the impact of overseas epidemic situation, but it was difficult to continue in the later stage.

(2) the so-called "peak" of market demand has been falsified. Strong demand to further consolidate!

(3) inventory pressure has become a recollection.

(4) the total inventory of the five major varieties is 25.2 million tons, and the total inventory of rebar is 13.17 million tons, which is lower than last year's peak (25.3 million tons of five varieties and 13.6 million tons of rebar). If the author considers the equivalent value of the unified caliber sample: the total inventory of the five varieties is 22.59 million tons, and the rebar is 11.8 million tons. I would like to ask the shutter people, whether begonia is still the same! What is the driving force behind the fall in steel prices?

6. The rest of the logical thinking remains unchanged. The rebound is still on the way. Don't worry about gain or loss.

 

Attachments.

1. Despite the five-day holiday, demand is still impressive. South China Guangzhou spiral storage speed is good, supporting the demand for follow-up. In Hubei Province, the supply side impact during the epidemic period is small, but the post-epidemic demand retaliation period can be expected!

The so-called demand in the market peaked and was further falsified! The author predicts that the continued expansion of demand in the later stage is a high probability event.

With the sharp rise in scrap prices, the independent electric arc furnace steel plant has reached the profit and loss edge line again, and the output expansion is very limited; the blast furnace operation rate (about 87%, Tangshan area about 84%) is close to the high level, only considering the expansion from the start-up rate and limited, it is more likely to increase the scrap addition ratio, but also subject to the limited scrap resources. In short, the supply side expansion is very limited. As for the interpretation of inventory value has been analyzed before the section, do not repeat! Simple and rough sentence: consider the same mouth sample, now the five major varieties, the total inventory of rebar

In fact, it is also lower than last year's peak! Why is the market sad? Hot roll market into and Xiao he, defeat and Xiao he! The holiday performance is stronger than the rebar so far, in addition to the common factors of rebar, the epidemic situation in major European countries has entered the second stage.

2. Coke fundamentals have been quietly improved, high-speed charges to help costs move up, 4.3 meters coke oven capacity on the road. Pay attention to the rainfall. Iron ore medium-term fundamentals under pressure, short-term dance with rebar. Concerned about the development of the epidemic in Brazil.

< 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 market liquidity crisis and to deal with possible economic turmoil, the Federal Reserve has opened an unlimited and bottomless QE monetary easing policy stimulus, which is ugly. There is no doubt that all non-American countries have paid for it, and no matter what measures are taken, 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 between the United States and the United States is the epidemic, which is uncertain at the beginning of the epidemic, while this year's economic recession is certain. 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 are unable to produce normally due to the impact of the epidemic, and at the same time, they have to face a sharp decline 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.

The bottom of the joint deposit box is all bet on the king of 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? We'll 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.

There is no doubt about getting on the podium for the European and American epidemic Cup champion! For the good is the happiest, for the evil can not escape. Leisurely heaven good reincarnation, the vast sky forgive 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. Too many to write!

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.

On the supply side.

At present, the profit of long-process steel per ton is 300-400, and the original part of the long-process shutdown and overhaul is gradually resuming, even if the steel enterprises in Hubei Province that have been shut down due to the epidemic situation will resume production no later than mid-April; independent electric arc furnace steel mills have a small profit and a long dimension due to the scrap price drop of less than 100 yuan per ton of steel and even partial tax rebates and local government subsidies. 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: 7333-0.95-6966 (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 price of the steel mill is determined, and the time dimension is exchanged 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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