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[SMM Iron and Steel] is broad-minded and about, thick accumulation but thin hair.
Jul 2,2020 18:59CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

(2 July)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / critical count death / 528pm 1920 Universe 7Thirty 4648.

 

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

 

Fauci: the United States is moving in the wrong direction, and I'm not surprised that it will grow by 100000 in the future. There is no guarantee that the United States will have an effective new crown vaccine early next year.

 

Us Empire priority: new / confirmed cumulative cases / deaths / 48885 / > 2.7799 million / 13j0789.

 

Serious countries and regions.

2. Brazil: > 1.4533 million / 36687 *

3. India: > 605200 / 18777 Maple 17848.

4. Russia: > 654400 / 6556 Universe 9536.

5. UK: > 313400 / 829Universe 4gamma 3906.

6. Peru: > 288400 / 2848amp 9860.

7. Mexico: > 231700 / 5432 Compact 28510.

8. Chile: > 282000 / 2650 / 5753.

9. Iran: > 230200 / 2549amp 10958.

10. Baccartan: > 217800 / 4133 Unix 4473.

11. Saudi Arabia: > 194200 / 3402 Compact 1698.

12. South Africa: > 159300 / 6945amp 2749.

13. Bangladesh: > 149200 / 3775amp 1888.

14. Columbia: > 102000 / 2803 Compact 3470.

15. Argentina: > 67100 / 2262 Compact 1351.

 

< 2 > Today's current playback

1. The spot market price of steel remains stable as a whole.

Deal: not bad.

Market mentality: in a sub-stable state.

Tangshan area billet downward 10 to 3300 yuan / ton.

Raw material end:

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

The price of coke is generally stable: the game of coke steel is intensified.

The price of imported main coking coal remained stable after rising.

The spot market price of iron ore port is stable as a whole.

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

This morning, Liantie pulled up rapidly, and the price of the port spot market rose steadily; Liantie dived slightly near the end of the day, and the spot market merchants had more room for bargaining. The turnover of PB powder in Shandong area is 765 RMB770 per ton, and that of Tangshan 780 RMB790 per tonne. Most steel enterprises purchase on demand, and the overall market activity is general. According to SMM, the recent port inventory in Shandong has increased slightly, or there has been a certain suppression of spot prices, and the price gap between Shandong and Tangshan is expected to be maintained in the short term. From the point of view of the variety of transactions, the price difference of port PB powder continues to narrow to 65 RMB75 / ton, the performance-to-price ratio of lump ore is still prominent, and there is a certain support for lump ore premium in the short term. However, due to the restraint of high block ore inventory in the port and the continuation of rainy weather in many areas recently, the short-term demand for lump ore is still difficult to improve significantly. The pellet premium has rebounded slightly recently, the cost-effective advantage of domestic fine powder in some areas has declined, superimposed the impact of production restrictions in Tangshan, steel mills have increased demand for pellets in the near future, pellet premium may be expected to rise at a low level. [SMM Steel]

 

2. Futures:

RB2010 main contract: a substantial increase in positions between 3560 and 3582 within the day, with a strong shock, closing at the end of 3573.

HC2010 main contract: weak concussion between 3551 and 3576 within the day, closing at 3563.

Iron ore i2009 main contract: within the day between 735 to 747.5 weak shock, closing at 738.5.

Coke J2009 main contract: within the day between 1864.5 to 1883 horizontal concussion, closing 1872.5.

Coking coal JM2009 main contract: within the day between 1170 to 1196.5 shock uplink, closing 1193.

 

< 3 > Forecast for tomorrow:

1. Spot aspect: maintain strong operation.

2. Futures:

RB2010 main contract: concussion between 3540 and 3610.

HC2010 main contract: concussion between 3530 and 3600.

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.

In January and June, Caixin's manufacturing PMI recorded 51.2, up 0.5 percentage points from May, the highest so far this year, and the second consecutive month of expansion. The domestic economy continues to repair in the post-epidemic era, and both sides of supply and demand are improving synchronously. The pressure of employment can not be ignored. For some time to come, the task of promoting employment is still arduous.

 

2. China Index Research Institute: in June, the average price of new housing in 100 cities across the country was 15461 yuan per square meter, up 0.53% from the previous month, an increase of 0.22% over the previous month. It rose 3.16% from the same period last year, an increase of 0.17 percentage points over the previous month. In terms of second-hand housing, the average price of second-hand housing in 100 cities across the country was 15301 yuan per square meter, up 0.30 percent from the previous month, 0.18 percent lower than last month, and 2.34 percent higher than the same period last year.

3. Baltic dry bulk index: up 0.22% to 1803.

4. Sunrise interpretation of inventory data

The output of the five major varieties fell slightly by 2100 tons to 11.0603 million tons. Of this total, rebar continued to increase slightly by 4400 tons to 4.0075 million tons, hot rolling slightly increased by 6000 tons to 3.2806 million tons, and medium and heavy plates dropped sharply by 24100 tons to 1.3675 million tons.

The total inventory of the five major varieties continued for the second week, increasing by 700000 tons to 21.2302 million tons. Among them, the rebar warehouse for the third consecutive week, the total inventory increased by 522300 tons to 11.409 million tons, hot rolling increased by 58300 tons to 3.5628 million tons.

The warehouse of the five major variety factories increased by 253300 tons to 6.4564 million tons. Among them, the rebar factory warehouse increased by 228200 tons to 3.436 million tons, and the hot rolling mill warehouse increased by 9600 tons to 1.0372 million tons.

The stock of the five major varieties increased by 446700 tons to 14.7738 million tons. Among them, the rebar warehouse increased by 294100 tons to 7.973 million tons, and the hot rolling warehouse increased by 48700 tons to 2.5256 million tons.

See Table 1 for details.

Interpretation:

The total output of the five major varieties peaked and fell as expected. Among them, the growth rate of rebar also fell, the later flow of hot metal to hot coil varieties is a high probability event! The output peaked in stages and fell back and moved on.

Meiyu in the south has a greater impact on demand, and the apparent demand is further reviewed. However, with the end of rain in East and South China and the epidemic situation in Beijing has been brought under control (Xiongan New area has a large demand), strong demand can be expected to return. Go up to the west building alone and watch the rain and clear up. There is no need for red rain to wash your cheeks.

Steel mill inventory pressure transfer community pressure forced steel traders to reduce the warehouse at a low price is already on the road, and the rebar base for three consecutive weeks normally requires 3-6 weeks of destocking consumption. However, the overall inventory is less than 8 million tons, so there is no need for over-selective interpretation; if the absolute price factor is added, it will be even more safe.

Overall interpretation, pessimism is less than market expectations, in line with the author's expectations.

 

5. Macroscopic orientation and basic plane dimensionality.

A shares, Mandarin goods are full of delight! The black department is still on its way to bounce in the main direction. No, no. The black department is still crossing Chishui, and the original sin is that some institution's tortoise goes against the mood of capital, how can it allow longevity to be desecrated! The benevolent see benevolence, the wise see wisdom, wait and see!

 

6. Stone coke

Coke market gratitude and hatred emotional: Shandong, Shanxi, Hebei coke enterprises opened the seventh round of rise, some steel mills complain. It is said that there is a market when the spot reaches its peak, only because of the high price. However, from the perspective of fundamentals: Coke enterprises basically have no inventory, supply is still tight, and the demand side can still be expected in the later stage.

In terms of iron ore, the view remains unchanged: high demand is unscathed, supply-side hard core is still an epidemic in Brazil; as for the so-called inventory fluctuations, it is still necessary to look at them through a filter, and capital position manipulation is common.

 

With Wednesday's heart words

The probability of gradual reduction 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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