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[SMM current Daily Review] go up to the west building alone and watch the rain and clear up!
Jul 1,2020 18:46CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

Go up to the west building alone and watch the rain and clear up!

(1 July)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / severe death / 513Universe 1918Universe 7tick 4648.

Overseas epidemic situation: new / confirmed cumulative cases / deaths / 1605206 / > 10.5075 million / 50pj9428.

Us Empire priority: new / confirmed cumulative cases / deaths / 45911 / > 2.7279 million / 13j0123.

 

Serious countries and regions.

2. Brazil: > 1.4084 million / 27536Universe 5pm 9656.

3. India: > 585700 / 12469 Compact 17410.

4. Russia: > 647800 / 6693Comp9320.

5. UK: > 312600 / 689 Universe 4gamma 3730.

6. Peru: > 285200 / 2946amp 9677.

7. Mexico: > 226000 / 3805 Compact 27769.

8. Chile: > 279300 / 7411 / 5688.

9. Iran: > 227600 / 2457amp 10817.

10. Baccartan: > 213400 / 28250.4395.

11. Saudi Arabia: > 190800 / 4387 Universe 1649.

12. South Africa: > 151200 / 6130swap 2657.

13. Bangladesh: > 145400 / 3682 Compact 1847.

14. Columbia: > 97800 / 3274 Compact 3334.

 

< 2 > Today's current playback

 

1. The spot market price of steel is generally weak and stable. It fell slightly in most regions and rose slightly in some regions. Chengdu and Xi'an rose slightly by 10 yuan / ton; Shanghai, Hangzhou, Nanjing, Xiamen, Zhengzhou and Hedan decreased by 10: 30 yuan / ton; the rest of the region was stable.

Transaction: nearly 200000 tons, not bad.

Market mentality: actively shipping the owner.

Tangshan billet uplink 10 yuan to 3310 yuan / ton.

Raw material end:

The market price of scrap steel is generally weak and stable.

Coke prices are generally stable: the seventh round increase of 50 yuan / ton in Shandong direction was opened yesterday, and Jinzhong region is following up today! At the same time, Jincheng steel enterprises demand a reduction of 50 yuan / ton. Sunrise in the east and rain in the west.

The price of imported main coking coal rose steadily.

Iron ore port spot market prices are generally mixed.

For details, see SMM Nonferrous net [Daily Review of Iron Ore Market]:

With the narrow range of concussion in the morning trading of Liantie, the price of the port spot market rose steadily; in the afternoon, with the rapid diving of the market, the bargaining space of some merchants expanded. Some merchants are willing to ship goods in general, individual orders are discussed one by one. The purchasing mood of steel mills is not high, and the overall transaction is mediocre. The turnover of PB powder in Shandong area is about 765 yuan / ton, while that of Tangshan 775 / ton is 785 yuan / ton, which shows both ups and downs as a whole. Recently, some steel enterprises have arranged blast furnace maintenance one after another, which has suppressed the price of iron ore to a certain extent. Superimposed end-to-end delivery is not smooth, steel prices have been under pressure in recent days, it is difficult to support ore prices. However, considering that in the later stage, as the rainy weather in some areas ends, the impact of the epidemic in Beijing weakens, and terminal downstream demand will continue to be released in July, there may still be a boost for late-stage timber and iron ore prices.

 

2. Futures:

RB2010 main contract: within the day between 3542 to 3575 horizontal concussion, closing 3566.

HC2010 main contract: weak concussion between 3545 and 3592 within the day, closing at 3567.

Iron ore i2009 main contract: weak concussion between 730.5 and 750 within the day, closing at 742.

Coke J2009 main contract: continue to bottom between 1890 and 1858.5 within the day, closing at 1870.5. Coking coal JM2009 main contract: within the day between 1171.5 to 1181 narrow weak shock, closing 1173.

 

< 3 > Forecast for tomorrow:

1. Spot aspect: stable operation is the main.

2. Futures:

RB2010 main contract: concussion between 3510 and 3610.

HC2010 main contract: concussion between 3530 and 3610.

I2009 main contract: concussion between 730 and 760.

J2009 main contract: concussion between 1860 and 1930.

JM2009 main contract: concussion between 1160 and 1200.

3. Spot operation tip: if there is no pressure on inventory, replenish the inventory at a low price.

4. Futures.

Thread, hot coil: high selling and low suction rolling operation in short term.

Iron ore: the main thing is to do more than bargain in the range, and more than 725 stops.

Coke: the main operation is high altitude and low multi-main operation in the range of radicals, the multi-order effectively falls below 1860 stop-loss, and the empty single effectively breaks through 1930 stop-loss.

Coking coal: wait and see, chicken rib market, more trading in the range of activists.

RB2010 main contract: support level 3540.

HC2010 main contract: support level 3530.

I2009 main contract: support level 725.

J2009 main contract: support level 1860.

JM2005 main contract: support level 1160, pressure level 1200.

 

< 4 > Information and heart words.

1. Ministry of Ecology and Environment: next year, the import of solid waste will be completely banned and applications will no longer be accepted.

Ministry of Ecology and Environment spokesman Liu Youbin said at a regular news conference on the 30th that in the second half of this year, the Ministry of Ecology and Environment will continue the examination and approval model for the first half of this year and further reduce the import of solid waste, including scrap metal, according to the established plan. Starting from 2021, China will completely ban the import of solid waste, and the Ministry of Ecology and Environment will no longer accept and approve applications related to the import of solid waste.

 

2. The prices of thread, wire rod and screw in Shagang remain unchanged in the first ten days of July. now the third-grade large snail 3850 and HPB300 high line 3910, snail 3950, cash including tax, thread offset 150, reel offset 50.

 

3. [2 trillion yuan of central government funds have reached the grass-roots level] according to the news, the impact of the epidemic has superimposed 2.5 trillion yuan in tax and fee cuts, and grass-roots fiscal revenue has been greatly reduced, but the pressure on expenditure on "six stability" and "six guarantees" has increased sharply. In order to alleviate the financial difficulties at the grass-roots level, at the two sessions of the National people's Congress, which ended at the end of May this year, the central finance decided to give all the additional 2 trillion yuan to the local governments, and created a special transfer payment mechanism to allow this fund to go directly to the finance at the county level. Provincial finance is not allowed to intercept. Grass-roots financial figures in several provinces confirmed that the direct funding line was received yesterday.

 

4. [June 25-July 1 Guangzhou building materials social inventory-0.50% thread inventory-2.63%] the total inventory of building materials in Guangzhou this week was 1.5249 million tons, down 7700 tons (- 0.50%) from the previous year, + 52.61% compared with the same period last year. Among them, thread inventory was 1.0415 million tons, down 28100 tons (- 2.63%) from the previous month, + 67.44% compared with the same period last year; reel inventory was 483400 tons, an increase of 20400 tons (+ 4.41%) compared with the same period last year, and + 28.15% from the same period last year. [SMM Steel]

 

5. The coke price of individual coke enterprises in Jinzhong area has been raised by 50 yuan per ton, with a cumulative increase of 350 yuan per ton for seven rounds, which will be implemented on July 2. At present, the game of Coke Steel is in progress, and the follow-up price adjustment needs to be followed up.

 

6. The phased reduction probability of production capacity is enhanced: three-dimensional extrusion of steel plant (overall loss of per ton steel profit of independent electric arc furnace / further convergence of per ton steel profit of long process steel plant, increase of plant depot, resistance demand of rainwater). It is common to reduce production and overhaul in independent electric arc furnace steel mills (single-shift operation is more common); the priority of long-process steel mills is the proportion of scrap added, followed by overhauling (currently overhauling and reducing production is being opened …. No, no. There is rain after thunder in Tangshan area.

The bottom of the overall price is tamped: the price of stone coke is towering, the cost support is further strengthened, and the bottom of the price is tamped.

Rain differentiation region enhanced: on the whole, the end of rain in the south is drifting away, inventory in Guangzhou is falling slightly, the demand for rebar is better than snail, and the demand for new construction is expected; Hangzhou inventory in East China remains high, superimposed rain impact, market pessimism is strengthened, and there is still a small gap at the bottom of the price; the Shanghai area is still under pressure from Hangzhou.

This Wednesday night and Thursday inventory data sunrise is not good market expectations, futures decline whether there is an early reaction?

The domestic macro environment continues to improve: the A-share index has broken through the 3000 mark, non-ferrous copper, known as the crown macro index, has rebounded to a new high, the Ministry of Finance has 2 trillion yuan in express delivery funds, the epidemic in Beijing is under control, and the demand for Xiongan New area is high, so why worry about the longevity of funds.

The seventh round of coke increased by 50 yuan / ton, in the game of Coke Steel …. No, no. Market inertia thinking that the profits of scorched enterprises should not be higher than those of steel enterprises, just like the ridiculous "US Emperor first" in Trump's phrase. The future coke depth discount is more than 230 yuan / ton. Why is Jiaojiao capricious?!

Iron ore point of view see yesterday's heart words, the new road strength: first, the copper surge is positively related to the outbreak of the epidemic in Chile! Is the iron ore similar to the outbreak in Brazil? Second, the Ministry of Ecology and Environment has issued a total ban on the import of solid waste, which is more conducive to the expansion of stone demand. In short, the benevolent see benevolence, the wise see wisdom!

 

With Tuesday's heart words

The domestic macro environment continued to improve, the manufacturing PMI50.9% exceeded expectations, and the economic expansion continued. Short-term rain in the south will still affect demand, if there is no pressure on inventory, the appropriate amount of replenishment depends on the rain weather conditions in each region. That is, the rain is coming to an end or the end of the bargain can be appropriate to replenish inventory, otherwise, wait.

Judging from the pressure on short-term scrap prices, the decline in the production capacity of independent electric arc furnaces and the proportion of scrap added to blast furnaces has obviously converged; the production limit of environmental protection in Tangshan area was greatly bluffed in June, and the results of supply-side reform "reached a new high". There is a policy need to limit the production of environmental protection in July (see unknown). The probability of periodic high decline of production capacity increases.

The impact of rain on demand in the south of the Yangtze River is not the return of demand to the west, with the end of the rain, the demand retaliatory return period is more expected! Rather than the formation of the so-called demand-driven turning point.

Don't be too sad to base for 2 or 3 weeks in a row. How much do you know about the steel price at the worst time? Not to mention the current Shanghai three brands of steel prices of 3430 yuan / ton, how much room to continue to decline?

In short, the author's point of view remains unchanged.

There is no essential change in iron ore fundamentals, and the increase in demand in the third and fourth quarters is a high probability event (the replacement capacity is concentrated, with a total of about 25 million tons). The supply-side hard core is still concerned about the development of the epidemic in Brazil. No, no. Capital sentiment dominates the market and has nothing to do with fundamentals! The author is inclined to reach a new high in the period of mining is a high probability event!

Coke: Sunrise in the east and rain in the west. The spot starts the seventh round of rally, and the future coke is in a frenzy. Short logic: the profit of coke enterprises is greater than that of steel enterprises, and the sixth round of increase should be the last crazy, who knows the mantis catches the cicada yellow sparrow! Xuzhou production capacity to withdraw from the basic landing; Shandong people kind! Thunderstorm colleague; pay attention to the rainfall in Shanxi direction?! The early stage is basically the sound of light and thunder without rain.

 

With Monday's heart words

The process of large-scale heavy rainfall occurs in many places in the south, and the demand has a great influence. The destocking has been blocked, the total inventory of the five major varieties has changed from falling to rising, and the rebar stock has been increased for 2 weeks, which has a great probability of continuing to increase this week. However, it is too early to judge the inventory inflection point, the author does not agree with the view of the market fence school, the so-called demand-driven weakening, inventory inflection point established, steel into the decline cycle and so on. No, no. The author had expected the last drop after the festival, the main influencing factors: first, the further increase of rain in the south in a short period of time. Second, with overseas outbreaks, crude oil and US stocks have sufficient conditions to make a comeback. Third, there is a lot of thunder and little rain in the production restriction of environmental protection in Tangshan area. Fourth, the accumulation of short-term inventory continues. Fifth, the market sentiment is disturbed by the fence faction.

At present, the independent electric arc furnace steel mill in East China has a loss of nearly 100 yuan per ton of steel (excluding government subsidies), and the output of independent electric arc furnace is on the brink of convergence! The cost of scrap in long-process steel plant is about 80 yuan / ton higher than that of hot metal, so there is no doubt about reducing the proportion of scrap. In June, production restrictions on environmental protection in Tangshan area can only be seen in thunder but no rain! Crude steel output reached a new high in June, "policy torture" on the supply-side reform, and the environmental protection production limit document in Tangshan area just landed in July! It is necessary to rain a little bit (see unknown). The rain in the south is about to leave the pavilion. Shijiao base is unharmed, only the disturbance of capital sentiment, and the cost support is strong. At present, there are high-value depressions in steel prices, and the logic of excessive pursuit is not clear. In short, after a short period of labor pains, recovery is not sunset; the author deduces that after the festival, the last fall to the ground, later pick up the rebound to wait and see! There are many battles on the road to a rebound in July. It is healthier after a short-term decline, and it is expected that steel prices will first restrain and then rise this week.

 

Market outlook for July: for details, see the monthly Review of June 25.

 

 

 

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