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[SMM Review] when the flowers are in full bloom, she smiles in the bushes!
May 11,2020 19:03CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(11 May)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / severe / 271 move 1690 picks 780 picks.

Overseas epidemic situation: new / confirmed cumulative cases / deaths / 77928 / > 4.0968 million / 279238.

The United States has an overwhelming priority: new / confirmed cumulative cases / deaths / 17999 / > 1.367 million / 80787.

Serious countries and regions.

UK: > 219000 / 3923 31855.

Russia: > 209000 / 1915 (death).

Brazil: > 162600 / 6638 11123.

India: > 67200 / 4353 Universe 2212.

Peru: > 67300 / 2292 Compact 1889.

Canada: > 6.88 1050 4870.

< 2 > current playback:

1. The spot market price of steel has been stable since the weekend, rising slightly in North China, stable in Guangzhou in South China, up 10 yuan in Shanghai in East China, down 10 yuan in Hangzhou and 10: 30 yuan in Fuzhou.

Trading volume remained strong.

The market mentality is good.

The billet in Tangshan area is stable to 3140 yuan / ton.

Raw material end:

Scrap prices are still rising in most areas and falling in the southwest. Low-cost resources are difficult to buy.

 

Coke price stability in the strong: the first round of rise to the ground in an all-round way.

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

Iron ore port spot market prices rose 5 yuan in the morning, but trading is weak, traders quote actively, steel mills are willing to be weak. Shandong direction PB powder mine 660 yuan / ton has a transaction, Tangshan area PB powder ore 670 yuan / ton quotation. Steel mills turn to low-grade mines for on-demand procurement.

2. Futures:

RB2010 main contract: within the day between 3432 and 3474 horizontal disk concussion, the end of 3452.

HC2010 main contract: within the day between 3309 and 3340 horizontal disk concussion, the end of 3329.

Iron ore i2009 main contract: weak concussion between 626.5 and 637.5 during the day, ending at 630.

Coke J2009 main contract: within the day between 1723 and 1753.5 shock downward, the end of 1726.

Coking coal JM2009 main contract: within the day between 1073.5 and 1097 weak shock, tail 1080.5.

< 3 > current forecast for tomorrow

1. Spot: although the stock impulse high fall probability, but the center of gravity is still moving up.

2. Futures:

RB2010 main contract: concussion between 3420 and 3510.

HC2010 main contract: concussion between 3290 and 3380.

I2009 main contract: concussion between 620 and 640.

J2009 main contract: concussion between 1710 and 1770.

JM2009 main contract: concussion between 1070 and 1130.

3. Spot operation tips: high depositors continue to sell low suction rolling operation mainly, late callback opportunity to make up for the appropriate amount of inventory.

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 3420.

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. China's social financing increased by 3.09 trillion yuan in April, compared with a previous value of 5.15 trillion yuan and an expected 2.65 trillion yuan. China's M2 money supply in April was 11.1% from a year earlier, and expected to be 10.3%, up from 10.1%. China added 1.7 trillion yuan in new yuan loans in April, with an expected 1.3 trillion yuan, up from a previous value of 2.85 trillion yuan. [SMM Steel]

2. [sales of excavators exceeded expectations in April] the industrial machinery sector strengthened. As of press time, Xugong machinery rose more than 5%, construction machinery rose more than 3%, and Liugong, Sany heavy Industries and Zoomlion rose more than 1%. Total excavator sales in April were 45400, up 59.9 per cent from a year earlier, according to brokerage research. From January to April, sales totaled 114100 units, up 10.5 percent from the same period last year. The actual demand situation of the terminal is better, mainly because there is a relatively obvious guarantee and supply pressure, and the current shortage ratio is still about 20%.

3. Shanxi coke began to rise 50 yuan per ton on May 13.

4. [Shagang mid-May thread flat plate] 11 Shagang mid-May ex-factory price rebar, disk screw, high line flat. Now rebar 3700, high wire 3760, disk snail 3800.

5. The recent price increase in steel mills is mainly due to a partial push. The supply side has reached the level of the same period last year. With the continuous increase of scrap price, more than 5.6% independent electric arc furnace began to lose money, a small number of tons of steel small profit, independent electric arc furnace output short-term convergence probability; The operating rate of the long process is also high, with a daily average of 2.37 million tons of iron water. In order to continue to expand and accept the shortage of scrap resources and profits generally converge below 200 yuan / ton, consider that the "two sessions" are just around the corner, environmental protection production restrictions are on the road, short-term output is difficult to expand or even has the probability of small convergence.

Cement prices continue to rise, excavator demand exceeded expectations, mutual confirmation of strong terminal demand is still on the way. No, no. As for the so-called May rainy season will cause demand to peak, just short "night road whistle." The author has also analyzed the impact of the rainy season, do not repeat! The center of gravity of steel price moves up in May, I am sure that it will remain unchanged! Hangzhou market short-term by Shagang flat push and Sha, Yong, medium steel mills due to the impact of high-quality carbon steel production plate snail, although the rebound strength is limited, but the general direction of rebound is indisputable. In short, it is suggested that late enlightened people every callback dare to enter the market to replenish the warehouse!

Coke fundamentals are sound, Shanxi opened the second round of increase of 50 yuan / ton, but the second round of rise and fall mainly depends on two factors, one is the elimination of 4.3 meters coke oven "rainfall" and long process profits must be expanded.

Iron ore view remains the same: short-term domestic rigid demand and Brazilian epidemic funds are still on the way, following rebar fluctuations; medium-term pressure is doomed.

6. According to the inventory data, on Thursday, the author expected that the total inventory of the five major varieties would be 23.2 million tons and 12 million tons of rebar, respectively, if the equivalent inventory data were taken into account, the total inventory of the five major varieties would be about 2 million tons and that of rebar about 1.2 million tons. That is, the total inventory of the five varieties is 20.2 million tons and the total inventory of rebar is 10.4 million tons. Correspond to the current steel price, do not want to rise is difficult!

7. Focus on overseas outbreaks.

< 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 man mistakenly hit the Yellow Crane Tower and the counter-cyclical adjustment was 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, the liquidity crisis was temporarily suspended, market sentiment was effectively calmed down, and US 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. Because of the cash flow crisis caused by the sharp reduction of income, many enterprises will have to face the risk of bankruptcy, and the resulting rise in unemployment 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!

 

Look at the great China, China's monetary policy is once again facing a big test! Does it follow the fact that the developed economies of the United States have no choice but to fill up with water 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 of monetary stimulus to deal with epidemic control investment and hedge against the global economic 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 judged that production will become normal in April.

Quantitative valuation: 6800 to 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. In April, the return period of qualitative demand reached the normal level of about 95%, which is more objective.

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 roughly the same.

2. Solution of towering floating Cloud in inventory

Verify 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 to verify:

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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