Iron ore disk finishing pays attention to the situation of transportation

SMM News: yesterday, the main iron ore contract closed at 721.5 yuan / ton, down 1.5 yuan / ton. In the past two days, the iron ore disk position has declined, the trading volume has been enlarged, and the situation of concussion has been adjusted. Spot transactions, market activity in general, over the weekend some manufacturers in Tangshan, Hebei Province carbon billet factory prices fell 20 yuan to 3250 yuan / ton, Rizhao Port PB powder price in 730 yuan / ton. The price of Caofeidian Port Super Special Powder is 600 yuan / ton.

Macro: yesterday the midpoint of RMB against the dollar was 7.1209, down 270 basis points. From the monetary point of view, it is still necessary to "promote the loan interest rate to continue to decline" in the future, and there is a greater probability that LPR will continue to decline in the future, but the maximum marginal intensity of easing has passed.

Fundamentals: last week, China's 45 MTR ore arrived at the port of 22.073 million tons, down 585000 tons from the previous month. Among them, 15.119 million tons of Australian ore arrived in Hong Kong, a sharp decrease of 1.384 million tons compared with the previous month, which is at the average level of this year. Brazilian mines reached 4.724 million tons, an increase of 1.091 million tons from the previous month, the second highest this year, but still below the normal level. Arrivals are expected to increase slightly this week. Downstream, according to CISA statistics, steel enterprises produced a total of 20.8039 million tons of crude steel in mid-May 2020, an increase of 1.40% month-on-month and 1.88% over the same period last year. Pig iron was 18.6898 million tons, up 1.10 percent from the previous month and 2.60 percent over the same period last year. 19.5961 million tons of steel and 1.9596 million tons of steel, an increase of 2.43 percent over the previous month and 3.17 percent over the same period last year.

On the whole, although iron ore supply rebounded in the second quarter compared with the first quarter, the finished end continued to be in high consumption, steel mills were fairly profitable, and the output of pig iron and crude steel was growing year-on-year. At the same time, inventories, which reflect supply and demand, have been declining. In the short term, there is no obvious weakening signal of steel demand, and the lower Treasury-to-consumer ratio supports higher absolute prices, so it is still recommended to do more on bargains.

Concern and risk points: the speed of reduction of steel stocks, the development of epidemic situations at home and abroad, economic stimulus policies, changes in environmental production restrictions and landing, whether shipments in Brazil and Australia are significantly higher than expected, RMB fluctuations, the resumption of production in Brazilian mines, regulatory intervention, Sino-US trade frictions and developments of the two conferences. Related reading

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Registration contact: Lu Qingping, Iron and Steel Division of SMM

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