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[SMM issue current Day Review] Life must be happy, do not make the golden bottle empty to the month.
May 15,2020 19:13CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(15 May)

< 1 > in terms of epidemic situation.

Domestic epidemic: confirmed / imported cases / asymptomatic / severe / 1751692619.

Overseas epidemic situation: new / confirmed cumulative cases / deaths / 95338 / > 4.456 million / 299003.

American Emperor: not the heart is not the Buddha, the dog bites the bone withered.

U.S. Priority: new / confirmed cumulative cases / deaths / 23033 / > 1.457 million / 86912.

Serious countries and regions.

Russia: > 262800 / 10598 2418.

United Kingdom: > 233100 / 3446 33614.

Brazil: > 203000 / 13761 13999.

India: > 82000 / 3942 2649.

Peru: > 80600 / 4298 2267.

Canada: > 7.34 1057 5472.

Saudi Arabia: > 4.68 2039 283

Pakistan: > 35700 / 1430 803.

Singapore: > 26800 / 793.

< 2 > play back this week:

1. Spot aspect

Steel spot market prices are generally stable and strong, regional differentiation strengthened, East China market performance is the weakest; most steel mills up, a small number of steel mills flat push, on Friday, steel prices have increased sharply one after another. The performance of hot coil is still stronger than that of rebar, with an average increase of 50 yuan / ton, while the billet in Tangshan area is up 30 yuan (3140 yuan / ton on May 8). High demand continues; the market mentality is stable, cautious wait-and-see, positive. The overall situation is still in the pipeline.

2. Futures

The overall performance of the material end is stronger than the finished material: rebar, hot coil strong shock, iron ore again crazy.

RB2010 main contract: strong concussion between 3426 and 3495 during the week, closing at 3464 per week.

HC2010 main contract: within the week between 3305 and 3382 shock uplink, weekly close 3365.

Iron ore i2009 main contract: rose sharply between 626.5 and 668 during the week, closing at 668 per week.

Coke J2009 main contract: a sharp rebound between 1712.5 and 1795 during the week, closing at 1776.5 per week.

Coke JM2009 main contract: the bottom rebounded sharply between 1073.5 and 1141.5 during the week, closing at 1124.5 per week.

3. Market game hot spot: supply and demand competition, who is the main ups and downs.

Short point of view:

The market is generally in doubt about the persistence of high demand during the Meiyu season in May, and the expansion of steel mill production is more deterministic and so-called high inventory.

Bullish point of view (author's point of view):

High demand resilience does not worry about the ancients, continue to be optimistic about infrastructure demand, real estate stock demand and rush demand; the so-called rainy season affects demand, construction conditions have quietly changed, can not follow the traditional thinking to prove new problems, the impact is extremely limited.

The expansion on the supply side is extremely limited: first, the policy side is suppressed, and the "two sessions" are imminent, and the environmental protection and production restriction is superimposed on the scabbard for up to 75 days, which has a more or less positive impact on military exercises. Second, the blast furnace operating rate of about 90%, independent electric arc furnace operating rate of about 68% has approached a high level, the long process due to the rise in raw material prices, especially the manipulation of funds to manipulate iron ore price high even floating clouds caused the cost to move up sharply, the profit per ton of steel converged below 150 yuan, and then relying on increasing the scrap addition ratio is of no benefit, not to mention the scrap steel resources are also difficult to buy; independent electric arc furnace steel mills began to lose money again. Steel prices do not continue to rebound, production continues to expand is a dream.

The so-called high inventory market interpretation still stays solidified thinking, five varieties of total inventory of 23.72 million tons, rebar 8.93 million tons, the so-called compared with last year is still 50% higher than a terrible feeling!? I wonder what the statistical social warehouse was last year. How much more now?! Familiar do not know if according to the equivalent inventory to see the steel price comparison, the current steel price opportunity and the risk who is high!

< 3 > Today's current replay.

1. Spot market prices in early trading in addition to South China Guangzhou, East China, Shanghai, Hangzhou, Fujian and other regions are weak, the rest of the region generally pulled up; afternoon rise followed up, steel mills around the clock sharply increased (50 / 100 yuan / ton). The hot coil performance is stronger than the thread duration. Since May, the rebound range of hot roll has reached the author's previous prediction of 200 ±50 neutral, and the cumulative increase of Lecong has reached 220 yuan / ton.

The deal is unusually hot! There is no doubt about high demand!

The market attitude has generally turned optimistic.

Tangshan area billet upward 10 to 3170 yuan / ton.

Raw material end:

Scrap prices are stable and weakening, Rizhao Port down 30 yuan / ton.

Coke price on the strong side of the operation: the second round of 50 yuan / ton opening. No, no. Jiangsu Xuzhou, Shanxi, Shaanxi, Hebei and other places rose.

Most areas of coking coal prices are temporarily stable, and some areas are still under pressure.

The spot market of iron ore port continued to rise 5-10 yuan. Shandong direction PB powder mine 680 yuan / ton, Tangshan area PB powder ore 690 yuan / ton transaction. Most of the replenishment activities of steel mills have been completed, and the overall transaction volume is significantly smaller than that of yesterday.

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

RB2010 main contract: strong concussion between 3426 and 3476 during the day, ending at 3445.

HC2010 main contract: strong concussion between 3332 and 3382 during the day, ending at 3365.

Iron ore i2009 main contract: between 643.5 and 668 in the day, closing at the end of 668.

Coke J2009 main contract: within the day between 1762 and 1795 rebounded to continue, the end of 1776.5.

Coking coal JM2009 main contract: within the day between 1115.5 to 1130.5 horizontal trading, closing at the end of 1124.5.

< 3 > next week's current forecast: the rebar has a high probability of making up for a large amount.

1. Spot aspect: the rebound is in progress. No, no.

2. Futures:

RB2010 main contract: concussion between 3450 and 3550.

HC2010 main contract: concussion between 3350 and 3480.

I2009 main contract: concussion between 650 and 715.

J2009 main contract: concussion between 1750 and 1830.

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: short waiting; radicals within the range of high sell low suction, fast in and out of the appropriate, fell below 650 single stop loss.

Coke: within the range of high selling and low suction trading, fell below 1750 single stop loss.

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

RB2010 main contract: support level 3420.

HC2010 main contract: support level 3330.

I2009 main contract: support level 650.

J2009 main contract: support level 1750.

JM2005 main contract: support level 1100.

< IV > Information and heart language.

1. Macroeconomic data:

[Bureau of Statistics: housing construction area increased 2.5% from January to April compared with the same period last year, new construction fell 18.4% from the same period last year]

National Bureau of Statistics: from January to April, the housing construction area of real estate development enterprises was 7.40568 billion square meters, up 2.5 percent from the same period last year, down 0.1 percentage points from January to March. Among them, the residential construction area was 5.21043 billion square meters, an increase of 3.8 percent. The new housing construction area was 477.68 million square meters, down 18.4 percent, or 8.8 percent. Of this total, the new residential construction area was 352.48 million square meters, down 18.7 percent. The completed housing area was 192.86 million square meters, down 14.5 percent, or 1.3 percent. Of this total, the completed residential area was 137.09 million square meters, down 14.5 percent.

From January to April, the land purchase area of real estate development enterprises was 31.51 million square meters, down 12.0 percent from the same period last year, down 10.6 percent from January to March, and the land transaction price was 169.9 billion yuan, up 6.9 percent, and down 18.1 percent from January to March.

From January to April, the sales area of commercial housing was 339.73 million square meters, down 19.3 percent from the same period last year, down 7.0 percent from January to March. Among them, the residential sales area decreased by 18.7%, the office building sales area decreased by 32.0%, and the commercial housing sales area decreased by 29.1%.

From January to April, investment in real estate development across the country totaled 3.3103 trillion yuan, down 3.3 percent from a year earlier, down 4.4 percent from January to March. Of this total, residential investment totaled 2.4238 trillion yuan, down 2.8 percent, or 4.4 percent.

Fixed asset investment in cities and towns in China fell 10.3 per cent from a year earlier in the January-April period and is expected to fall 10 per cent, up from 16.1 per cent.

China's crude steel output increased by 0.2 percent in April 2020 compared with the same period last year. According to the data of the National Bureau of Statistics, the average daily output of crude steel in China in April 2020 is 2.834 million tons, the average daily output of pig iron in April is 2.401 million tons, and the average daily output of steel in April is 3.567 million tons. China's crude steel output in April 2020 was 85.03 million tons, up 0.2% from January to April, an increase of 1.3%. In April 2020, China's pig iron output was 72.02 million tons, down 1.2% from January to April, an increase of 1.3% over the same period last year. China's steel output in April 2020 was 107.01 million tons, an increase of 3.6% over the same period last year. Steel output in January-April was 374.39 million tons, down 0.2% from the same period last year.

[raw coal production rose 6.0 per cent in April from a year earlier] the National Bureau of Statistics: in April, production of 320 million tons of raw coal, an increase of 6.0 per cent from a year earlier, was 3.6 percentage points lower than the previous month, with an average daily output of 10.74 million tons, down 140000 tons from the previous month. From January to April, 1.15 billion tons of raw coal were produced, an increase of 1.3 per cent over the same period last year. Coal imports grew rapidly and transaction prices fell. In April, imports of coal were 30.95 million tons, up 22.3 percent from the same period last year. From January to April, imports of coal were 130 million tons, up 26.9 percent from the same period last year. The comprehensive trading price of coal in the port continued to fall. On May 8, the coal prices of 5500, 5000 and 4500 kcal per ton in Qinhuangdao Port were 501 yuan, 442 yuan and 396yuan per ton, down 39 yuan, 41 yuan and 36 yuan respectively compared with April 3.

2. [Datong 20 coal mines overhaul and stop production Shandong coke enterprises or will limit production] according to the document, the relevant departments of Datong City in Shanxi Province recently issued a document demanding that 20 coal mines stop production in the near future. It is reported that Shandong coke enterprises may carry out comprehensive production restrictions in the near future to complete the reduction of coal consumption, and subsequent documents may be issued to require Shandong coke enterprises to further reduce production capacity or limit production throughout the year.

3. Inventories at 35 ports tracked by SMM totaled 101.79 million tons as of May 15, down 1.18 million tons from last week and 21.89 million tons from a year earlier, according to SMM Nonferrous. At the same time, the average daily volume of iron ore was down 110000 tons from last week to 2.769 million tons. Although the iron ore futures market has been strong this week, the spot market has been relatively weak; steel mills are generally receptive to price increases, and most steel mills are mainly purchasing on demand. Moreover, due to the strong operation of the disk, some businesses have a strong willingness to offer prices, and some of the mainstream tradable mines in the superimposed ports have been in a tight state in the near future, resulting in low overall market activity, and most ports have declined on a daily basis this week. The port of Jingtang rose month-on-month this week, with steel mills in the early stage of digesting inventories, and most steel mills have low inventories as some steel mills worry that there may be transport restrictions during the next two sessions. Short-term port inventories are still hard to accumulate significantly. [SMM Steel]

4. [Vale operating license suspended by Brumadinho City]

The Vale operating license was suspended in the city of Brumadinho in Brazil's Minas Gerais province because the company's field work "failed to comply with the rules of social segregation." According to foreign media, the mayor of Brumadinho ordered the suspension of the work of the Vale contractor. The city also suspended work to repair the C ó rrego do Feij?o tailings dam that collapsed last year, killing 270 people. In addition, the city has issued a decree allowing only those who are affected by the rupture of the tail dam to work in order to prevent workers from being infected with COVID-19,. There have been 13 cases of COVID-19 infection and another 250 suspected cases in the city. The city did not say how long Vale operations would be suspended, a claim that Vale has not yet responded to. SMM will continue to pay attention to the impact of the matter in the follow-up.

5. Macroeconomic data are generally neutral. Real estate data, mainly new construction area growth rate is still down 18.4%, but residential construction area growth of 3.8%, to further verify the real estate stock demand is not bad! The demand return period is more long-term, the author does not repeat N times! Nine words to awaken the lost, a huge amount of awakening the dreamer. On the supply side, with the sharp frenzy of stone coke (the author believes that the short-term deposit and review probability of scrap steel), the cost has moved up sharply, the profit of the steel mill has shrunk sharply, and the superimposed operating rate is as high as 90%. It is believed that the positive impact of 75 days of military exercises will be realized. No, no. And the "two sessions" environmental protection and production restrictions have been raining. No, no. Why are you worried about the sharp increase in production?!

In short, the author's forward-looking deduction and point of view remain unchanged.

Raw material end in addition to scrap, coke point of view to maintain the same.

Iron ore due to short-term three factors to promote, the term mine still has room to rise, short must wait. First, the outbreak in Brazil, the above news seriously affected the supply of Vale. Second, the military exercises, including and not limited to the impact of transport, increase in transit costs, cargo ships stranded in port, temporary use of civilian ships, etc., it is possible that things can happen. Third, the heat of capital manipulation, intensity further excited, of course, heaven wants its death, must let its madness!

 

[arbitrage training] Black experts impart practical experience to Scientific Trading to achieve profit growth https://news.smm.cn/news/101063159

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