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[SMM issue current Daily Review] there are all kinds of demand, and the price is pitiful and pitiful.
May 8,2020 19:08CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

Demand amorous feelings, the price see worry pity heart.

(8 May)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / severe / 441 1680 854 persons.

Overseas epidemic situation: new / confirmed cumulative cases / deaths / 91819 / > 3.845 million / 266233.

Moscow Mayor Sobyanin: residents of the city must wear masks and gloves when they go out to public places or take public transport. Wearing masks and gloves will be a policy that needs to be enforced. Sobyanin admitted that the actual number of infections is very different from the official figures, and the actual number of confirmed cases in the capital is close to 300000.

The United States is overwhelmingly preferred: new / confirmed cumulative cases / deaths / 25936 / > 1.2928 million / 76942.

Serious countries and regions.

United Kingdom: > 206700 / 5614 30615.

Russia: > 187800 / 10699 1723.

Brazil: > 135700 / 5756 9190.

India: > 56400 / 3364 1890.

Peru: > 58500 / 3709 1627.

Canada: > 6.49 1339 4408.

< 2 > current playback:

1. Steel spot market prices continue to rebound: an increase of 10: 30 yuan / ton. Guangzhou in South China increased by 20 yuan / ton, and Shanghai and Hangzhou in East China increased by 10 yuan and 20 yuan per ton. The performance of hot coil is still stronger than that of rebar.

Trading volume: although the high position is weak, but the overall is still OK.

Market mentality: steady.

Tangshan area billet upward 10 to 3140 yuan / ton.

Raw material end:

The price of scrap is rising steadily.

On the morning of May 8 in East China, Shanghai [Baosteel] heavy scrap 1480 including tax rose 110; Lianyungang sub-new steel plate 2450 rose 30%, Zhangjiagang sand steel furnace-2580 including tax stable, Yangzhou Qinyou steel sheet 2390 stable, Zhejiang Yuanli furnace-2540 including tax stable, Ningbo Jianying steel bar head 2240 stable, Jiaxing Taozhuang hot rolling and cold rolling up to 2300

 

On the morning of May 8 in East China, the first grade charge of Jiangxi [Jiugang] was 2270 stable, Shangraotai Xin heavy waste-2280 stable, Zhangjiagang Shagang Steel Furnace-2580 including tax stable, Zhejiang Yuanli Furnace-2540 including tax stable, Sanming and Sanming heavy scrap 2520 including tax stable.

 

On the morning of May 8 in East China, Fujian Sanming [Sangang] heavy waste 2520 including tax stable, Quanzhou Sanan heavy waste 2420 including tax stable, Fujian Yixin furnace 2540 including tax stable, Zhangjiagang sand steel furnace 1 2580 including tax stable, Hubei Zhongxing Tuo (Jiayu) uniform edge 2330 stable, Tangshan billet 3130

 

Coke price: the first round of rise and fall, after the rise is temporarily stable.

The price of coking coal has stabilized for the time being.

The spot market price of iron ore port rose 10%, but there was no market basically, and the trading was dismal: 660,665 yuan / ton for PB powder ore in Shandong direction, and 670,675 yuan / ton in Tangshan area.

2. Futures:

RB2010 main contract: strong concussion between 3439 and 3480 during the day, ending at 3452.

HC2010 main contract: within the day between 3306 to 3352 strong shock, closing 3327.

Iron ore i2009 main contract: within the day rebounded sharply between 624 and 636.5, closing at 633.

Coke J2009 main contract: within the day in 1742.5 to 1764.5 between the strong shock, the end of 1750.

Coking coal JM2009 main contract: within the day between 1084.5 to 1105 horizontal concussion, closing 1090.

< 3 > current forecast for next week

1. Spot: although there is a high falling probability, the center of gravity still moves up.

2. Futures:

RB2010 main contract: concussion between 3400 and 3510.

HC2010 main contract: concussion between 3280 and 3380.

I2009 main contract: shock between 600 and 650.

J2009 main contract: concussion between 1710 and 1810.

JM2009 main contract: concussion between 1070 and 1130.

3. The spot operation hint: the high storekeeper continues to sell the low suction rolling operation primarily, the late consciousness can still wait for the callback opportunity to replenish the inventory appropriately.

Thread, hot coil: in the early stage, most of the low positions meet the high and moderate reduction, and the high throwing and low absorption rolling operation is the main operation in the new single interval.

Iron ore: high selling and low suction 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 650.

J2009 main contract: support level 1710, pressure level 1760.

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

< 4 > Information and heart words.

1. General Administration of Customs: from January to April, the total value of China's imports and exports of goods totaled 9.07 trillion yuan, down 4.9 percent over the same period last year, or 1.5 percent less than in the first quarter.

2. Caixin services PMI recorded 44.4 in April, up 1.4 percentage points from March, but still in the contraction range, indicating that service sector output continued to decline and the downward rate slowed.

3. In April, China exported 6.319 million tons of steel.

According to the data of the General Administration of Customs on May 7, 2020, China exported 6.319 million tons of steel in April 2020, down 157000 tons from the previous month, down 0.2 percent from the same period last year. From January to April, China exported 20.601 million tons of steel, down 11.7 percent from the same period last year. In April, China imported 1.006 million tons of steel, down 131000 tons from the previous month, an increase of 0.6 percent over the same period last year. From January to April, China imported 4.184 million tons of steel, an increase of 7.4 percent over the same period last year. In April, China imported 95.712 million tons of iron ore and its concentrate, an increase of 9.799 million tons over the previous month, an increase of 18.5 percent over the same period last year. From January to April, China imported 358.397 million tons of iron ore and its concentrate, an increase of 5.4 percent over the same period last year.

3. Ministry of Industry and Information Technology: continue to do a good job in eliminating production capacity, revise and improve the replacement method of iron and steel production capacity.

4. Steel prices continue to rebound today, but high prices are weak. The main reason is the pullback of futures and the fear of heights in the market, which has nothing to do with fundamentals. Fundamental improvements are still on the way. The so-called "three high" expression of the market is a false proposition, that is, high demand, high supply and high inventory.

On the supply side: at present, the supply has reached a high level compared with the same period last year, and in the later stage, the scrap element and environmental protection production restrictions have picked up the arrow again, and the output follow-up expansion is very limited.

On the demand side:

Infrastructure demand, rush demand is on the way. No, no. Real estate stock demand and rush (due to delay in the delivery of liquidated damages) have only just begun to resume work in an all-round way. In addition, Hubei Province omni-directional absence of supplementary demand, accounting for about 3% of the total demand can not be underestimated. In short, high demand sustainability and certainty are beyond doubt.

The so-called high inventory author has analyzed that the equivalent inventory has been much lower than last year's peak! The essence of the view of phenomenon is the hard core.

In short, there are not many viewpoints, and the deduction of pro-supportive logic and viewpoints remain unchanged.

5. Raw material end.

In terms of iron ore, medium-term fundamentals are under pressure should not be blasphemous; short-term attention to the progress of the epidemic in Brazil, mainly multi-position and multi-inch funds to tell stories. True story foreign steel mills reduce production, Australia kangaroo epidemic control is very good but no audience. In short, it follows the fluctuation of rebar in the short term, and the view of longevity test remains unchanged in the medium term.

The price of scrap steel has peaked in stages, and it is difficult to continue the rise.

Coke fundamentals are healthy, pay attention to 4.3 meters coke oven "rainfall", the general direction of the author tends to think that the rebound is only relay. Jiao once purple micro-east (stand firm 1760), Hu Xingsen Yao Mang (about 1900).

Words from the bottom of my heart.

1. 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 fell 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 that of hot rolling 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 the five varieties increased slightly, which supported the forward-looking prediction of limited supply-side expansion. 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, with a high probability of small fluctuation in the later stage; the operating rate of blast furnace is also close to the high level of last year, and the increment in the later period is very limited. In the early stage of hot rolling, the production was reduced greatly by the impact of overseas epidemic, but it was difficult to continue in the later stage.

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

(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, the absolute value 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 the same. The rebound is still on the way. Don't worry about gain or loss.

 

Words from the bottom of my heart.

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 it is a high probability event that the demand will continue to expand in the later stage.

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 performance of the holiday is stronger than that of rebar so far. Except for 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 to 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 are expected to 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! The happiest is for the good, but the worst is for the evil. 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 the "enemy" a thousand, you will injure yourself by eight hundred. The Great Recession and Depression of the United States are doomed! Similarly, the overseas epidemic caused China's secondary disasters, and there is no doubt that import and export trade 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.

Take an overview of the in-table trading volume in late March and eliminate speculative pseudo demand, and verify each other, including but not limited to cement price, concrete mixing station, pipe pile demand and PC steel bar price, and then take a peek at the real estate start-up and the consideration of net steel export trade. 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:

First, it is precisely because the inventory is so high that 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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