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[SMM issue current Daily Review] I would have turned my heart to the bright moon, but the bright moon shone on the ditch.
May 14,2020 19:00CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

I would have turned my heart to the moon, but the moon shines on the ditch.

(14 May)

< 1 > in terms of epidemic situation.

Domestic epidemic: confirmed / imported cases / asymptomatic / severe / 1861692712.

Overseas epidemic situation: new / confirmed cumulative cases / deaths / 86378 / > 4.36 million / 293785.

Washington Post: the fight against the epidemic in the United States is a country-approved slaughter. Deliberately sacrificing the elderly, workers, blacks and Hispanics. Fauci, a famous American epidemiologist, heard the Senate: the actual number of deaths in the United States must be higher than the official statistics; hastily restart the economy or cause a new epidemic outbreak in the United States. American academic opinion poll: the poor performance of the US government in the fight against the epidemic has tarnished its international reputation. The top diplomat into a cannonball? The US media repeatedly criticized Secretary of State Pompeo for making something out of nothing.

American Emperor: thousands of officials bathe monkeys, the people were charcoal!

Priority to the United States: new / confirmed cumulative cases / deaths / 18951 / > 1.43 million / 85197.

Serious countries and regions.

United Kingdom: > 229700 / 3242 33186.

Russia: > 252200 / 9974 2305.

Brazil: > 191000 / 11555 13240.

India: > 78100 / 3763 2551.

Peru: > 76300 / 4247 Universe 2169.

Canada: > 7.22 1043 5302.

Pakistan: > 35700 / 2624 770.

Singapore: > 27900 / 770.

< 2 > current playback:

1. Steel spot market prices generally rebounded, strong in the north and weak in the south.

Trading volume: high demand toughness continues.

The market mentality is mainly stable.

Tangshan area billet upward 10 to 3160 yuan / ton.

Raw material end:

Scrap prices generally rise and fall each other.

The price of coke is stable and medium to strong. The second rally has yet to hit the ground.

The price of coking coal is generally stable.

Iron ore port spot prices continued yesterday strong, the overall rise of 5 yuan 10 yuan. Shandong direction PB powder 670,680 yuan / ton has a transaction, Tangshan area PB powder mine 685 yuan / ton has a transaction. Traders quoted actively in the morning, steel mills turned to low-grade mines increased willingness, the overall transaction is general.

2. Futures: the overall material is strong and the material is weak.

RB2010 main contract: weak concussion between 3474 and 3443 during the day, ending at 3445.

HC2010 main contract: strong concussion between 3364 and 3321 during the day, ending at 3344.

Iron ore i2009 main contract: within the day between 643 to 650 strong shock, closing at 647.5.

Coke J2009 main contract: within the day in 1722.5 to 1780 between the crown for beauty, the end of 1774.5.

Coking coal JM2009 main contract: within the day between 1113 to 1141.8 shock uplink, closing 1127.

< 3 > current forecast for tomorrow

1. Spot: strong operation.

2. Futures:

RB2010 main contract: concussion between 3430 and 3510.

HC2010 main contract: concussion between 3310 and 3380.

I2009 main contract: concussion between 635 and 650.

J2009 main contract: concussion between 1740 and 1810.

JM2009 main contract: concussion between 1100 and 1160.

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, the low position can be reduced by more than 3500, and the rolling operation of high throwing and low suction is the main operation in the new single interval.

Iron ore: Fenggao many just leave the market, activists can meet the right amount of test air.

Coke: more trading in the range.

Coking coal: wait-and-see or within the range of trading neutral.

RB2010 main contract: support level 3420.

HC2010 main contract: support level 3310.

I2009 main contract: support level 639, pressure level 650,653.5.

J2009 main contract: support level 1740, pressure level 1800.

JM2005 main contract: support level 1100, pressure level 1130, 1160.

< IV > Information and heart language.

1. The Prime Minister presides over the executive meeting of the State Council

The meeting called for taking the "six guarantees" as the focus of the "six stability" work and stabilizing the basic economic market. The meeting called for strengthening macro-control and hedging and giving full play to the joint efforts of fiscal, monetary, social security, employment and other policies. The meeting pointed out that it is necessary to increase the intensity of reform and opening up, and make more efforts to improve the institutional mechanism that lays the foundation and benefit the long-term, so as to stimulate the vitality of the main body of the market. It is necessary to open wider to the outside world, stabilize the industrial chain supply chain in promoting win-win international cooperation, and constantly enhance the resilience and potential of economic development.

2. Shandong starts "13th five-year Plan" pressure Energy reduction Coal closing War

Shandong Province, following the withdrawal of 2.4 million tons of coking capacity in March, Shandong Century Tongtai Coking Co., Ltd. and other five enterprises recently stopped production, a total of 3.7 million tons of production capacity. By shutting down coking, refining, steel production and coal-fired units, the province plans to achieve a net reduction of 37 million tons of coal consumption this year.

Note: due to this news superimposed output expansion boost, late realization of the market in the afternoon double focus double fly! The author predicts that once Zi Weidong (1760), Hu Xingsen Yao Mang (about 1900) will be realized. No, no.

3. Sunrise interpretation of inventory data:

The total output of the five major varieties increased by 292800 tons to 10.5628 million tons, of which the output of rebar increased by 123300 tons to 3.8131 million tons, and the output of hot rolling increased by 136800 tons to 3.0751 million tons.

The total inventory of the five major varieties fell by 1.4767 million tons to 23.7219 million tons, of which the total inventory of rebar fell by 925800 tons to 12.2456 million tons, and that of hot rolling by 185400 tons to 4.2274 million tons.

Steel mill inventory: five major varieties decreased by 476000 tons to 6.6175 million tons, rebar decreased by 365600 tons to 3.3136 million tons, hot rolling increased by 11300 tons to 1.1678 million tons.

Social warehouse inventory: five major varieties fell by 1.0007 million tons to 17.1044 million tons, rebar by 560200 tons to 8.932 million tons, hot rolling by 196700 tons to 3.0596 million tons.

See Table 1 for details.

Interpretation: this sunrise of inventory data is generally in line with expectations.

(1) the output of the five major varieties has increased significantly to 10.56 million tons to refresh the peak of last year, of which the output of 3.81 million tons of rebar is also close to the peak of last year, and the output of hot rolling has also been greatly expanded by 136800 tons to 3.08 million tons. The market is more worried about production expansion.

(2) the high demand is full of resilience.

(3) the inventory pressure has become a recollection to further tamp, the lack of specifications phenomenon is looming.

(4) the total inventory of the five major varieties is 23.72 million tons, and the total inventory of rebar is 12.24 million tons, and the absolute value is further 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 major varieties is 20.63 million tons, and the rebar social bank is 7.77 million tons.

(5) the author is highly skeptical about today's inventory data: demand increment is compressed and production expansion is watered down.

To sum up, at the end of the output expansion, the demand elongation N is good! The so-called inventory pressure has been forgotten! Overall optimistic interpretation!

4. Today, the spot market did not rebound sharply as the author expected, only due to the weak impact of futures. In particular, the markets in Hangzhou and Shanghai in East China are only stable (individual steel traders go up and down 10 yuan / ton each). The author tends to think that it is related to the conversion of high-speed wire rod workshop of Sha, Yong and Zhonggang to the production of high-speed wire rod, which suppresses market confidence. But the general direction rebounded on the road, without the need for red rain to wash the cheeks. The author is sure that there will always be a return, supply, demand, inventory of the three elements can not find a downward driving force! There are many battles on the road to rebound.

5. Iron ore.

Today, although the mining disk is still on the offensive, but the characteristics of stagflation appear. Starting from the fundamentals: first, the profits of domestic long-process steel mills further converge, the current profit per ton of steel is only 100 tons of steel, the end of output expansion is not related to the increment of iron ore demand, only the proportion of scrap steel. Second, environmental protection limits production and sharp blades out of the sheath. No, no. Third, in the outbreak of the epidemic in Brazil, the current good should be understood as a peak, far-fetched interpretation of the long-term mine, once the inflection point of the epidemic, it is more bearish. Fourth, from a global point of view, Europe and the United States, India, Shierqi, Russia, Japan, South Korea and other major steel mills have greatly reduced production, the convergence of iron ore demand can not hide their ears to steal the bell longevity test!

In short, short-term operation to face up to the manipulation of long funds, can be an appropriate amount of short, control the amount of positions can be. The author's medium-term pressure-bearing point of view remains unchanged. Stone is not stone, so it is not allowed to live a long life.

6. Bifocal.

Coke fundamentals have tightened the balance state! Follow-up needs to look at the direction of Shandong and Tangshan area (issued 13 "back ten" measures) to the production capacity of the "rainfall", similar information thunder for several months! It is a hard way to listen to his words and observe his deeds. The late enlightened period is mainly low, do not recommend excessive catch-up, miss it. Although "Jiao Mei" follows the dance, but the fundamentals are sick, activists can meet the right amount of high altitude, break through 1160 stop loss.

7. Pay attention to the epidemic situation overseas.

 

Attachments.

Although the expansion of supply is expected, it is still full of high demand toughness; although the market is expected to increase in macroeconomic stagflation (mainly due to the increased uncertainty of the overseas epidemic), but there is no doubt about the improvement of the fundamentals of the short-and medium-cycle iron and steel industry. The so-called dominant market of demand factors in the market is complete nonsense, the key is how to deduce its certainty, the author believes that high demand toughness is more deterministic! Let's define it as the result of the mismatch between the macro and the small cycle of the iron and steel industry. Today, although futures rose and fell back, it is only a small spray caused by market differences, still does not change the general direction of the rebound. The inventory data will be known tomorrow, and the author expects that the downsizing will still accelerate on the road. It is expected that the decline of the five major varieties will be more than 2 million tons and that of rebar will be more than 1.2 million tons. As for the output situation, the last plate iron ore pulled up, although the organization knew in advance that the output went to expand! But I am sure that expansion is very limited, although this has nothing to do with the nature of increased demand for iron ore, it is more scrap addition ratio! Iron ore diamond prices are dominated by financial manipulation, not fundamental nature. In short, the author's point of view remains unchanged.

Attachments.

1. Although supply expansion is expected, it is still resilient to high demand; although the market is expected to increase in macroeconomic stagflation (mainly due to increased uncertainty about the overseas epidemic), there is no doubt about the improvement in the fundamentals of the iron and steel industry in the short and medium cycle. the market's so-called demand factors dominate the market is complete nonsense, the key is how to deduce its certainty, the author believes that high demand resilience is more deterministic! Let's define it as the result of the mismatch between the macro and the small cycle of the iron and steel industry. Today, although futures rose and fell back, it is only a small spray caused by market differences, still does not change the general direction of the rebound. The inventory data will be known tomorrow, and the author expects that the downsizing will still accelerate on the road. It is expected that the decline of the five major varieties will be more than 2 million tons and that of rebar will be more than 1.2 million tons. As for the output situation, the last plate iron ore pulled up, although the organization knew in advance that the output went to expand! But I am sure that expansion is very limited, although this has nothing to do with the nature of increased demand for iron ore, it is more scrap addition ratio! Iron ore diamond prices are dominated by financial manipulation, not fundamental nature. In short, the author's point of view remains unchanged.

Attachments.

1. Steel author forward-looking deduction and point of view remain unchanged, there is no more logic, in short, the low storekeeper strongly recommend to enter the market, time will not wait!

2. Raw material end.

Scrap price rebound is difficult to continue, need to wait for independent electric arc furnace and long process profits to expand, but the space is also limited. Logical thinking is simple: long process operation rate, capacity utilization rate has been in a high position.

Double coke environmental protection production limit on the road, coke basic good, smooth sales, inventory is not high. With the improvement of coke profits, the pressure on demand is about to become a recollection. In short, the author is still a sentence: once Ziwei East (stand on 1760), Hu Xingsen Yaomang (there must be a new high).

In terms of iron ore, the outbreak in Brazil is an indisputable fact; as for the fact that high domestic demand is a false proposition, the blast furnace operation rate is now higher than that of the same period last year, and the only way to play it is to add the proportion of scrap steel that has nothing to do with iron ore demand (see the article on high demand for iron ore in reverse, without repeating it). Short-term fund emotion superposition follows rebar, empty single temporary wait and see is appropriate, but the author's medium-term pressure point of view remains unchanged.

Attachments.

1. The recent price increase in steel mills is mainly, part of the flat 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 at a high level, with an average daily iron flow of 2.37 million tons. If we want to continue to expand the shortage of scrap resources and generally converge to 200 yuan / ton, we should consider that the "two sessions" are imminent and that environmental protection will limit production on the road. The short-term output is difficult to expand or even has a small probability of convergence.

The price of cement continues to rise, and the demand for excavators is higher than expected, which confirms that the strong terminal demand is still on the way. No, no. As for the so-called May Meiyu season, demand will peak, but the bears "whistle on the night road". 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 is short-term affected by Shagang Pingtui and Sha, Yong, medium steel plants due to the conversion of high-quality carbon steel to disk snails, although the strength of the rebound 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 views remain unchanged: short-term rigid domestic demand and Brazil epidemic funding copying is still on the way, following the fluctuations of rebar; medium-term pressure is doomed.

2. 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!

< 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 determined to move on? Or is the "six-stable national policy" adjusted to "protect finance and employment stability"?. No, no. Test the wisdom of decision makers again! In short, hard injuries are hard to escape! After the "two sessions", the monetary policy of the 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 when the Yellow Crane Tower was sheltered to fight the epidemic, the United States was courteous, honest and shameful. 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 muscles and make threats on China's doorstep. 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 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. 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 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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