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[SMM current Daily Review] demand Beauty smiles with rain and dust
Jul 6,2020 18:29CST
The content below was translated by Tencent automatically for reference.

(6 July)

< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / severe death / 513Universe 1934Universe 109Universe 4648.


Zhang Wenhong: if respiratory infectious diseases do not reach mass immunity, and their prevalence has not been completely terminated, in winter, the degree of virus replication increases, and indoor activities also increase, and the risk of a second wave of rebound will be greater. But for the United States, Brazil and India, their peak has not yet appeared, and it is still in the first wave.


Overseas epidemic situation: new / confirmed cumulative cases / deaths / 18001 8978 / > 11.48 million / 53jue 2256.


Us media: the White House will revise the anti-epidemic plan, requiring the public to "put up with" the new crown virus. The epidemic of new crowns has intensified in 40 states in the United States, with new cases in many states reaching record highs. Trump says 99% of new crown pneumonia cases are completely harmless. Trump delivered an Independence Day speech: China is responsible for the pandemic. Us experts said: the severity of the epidemic in the United States has been greatly underestimated, the actual number of people infected with new crown pneumonia or the existing data of 10 to 24 times. Bill Gates on the new crown virus conspiracy theory: I am also involved in a bit scary, social media speed up the spread.


Us Empire priority: new / confirmed cumulative cases / deaths / 39464 / > 2.9829 million / 13pr 2569.


Serious countries and regions.

2. Brazil: > 1.6045 million / 28200 Universe 6pm 4900.

3. India: > 698800 / 23272 Universe 19707.

4. Russia: > 681200 / 6736amp 10161.

5. UK: > 285400 / 1140Universe 4penny 4220.

5. South Africa: > 196700 / 10853 Universe 3199.

6. Peru: > 302700 / 3481 Compact 10589.

7. Mexico: > 256800 / 6914 Compact 3gamma 0639.

8. Chile: > 295500 / 7443 / 6308.

9. Iran: > 240400 / 2560 Compact 11571.

10. Baccartan: > 231800 / 3191 Comp4762.

11. Saudi Arabia: > 209500 / 3580 Compact 1916.

13. Bangladesh: > 162400 / 2738amp 2052.

14. Columbia: > 102000 / 2803 Compact 3470.

15. Argentina: > 77800 / 2590amp 1507.


< 2 > playback from weekends to today

1. The spot market price of steel has rebounded as a whole, with an increase of 10 to 40 yuan per ton. East China Shanghai, Hangzhou accumulated only 10 yuan / ton: Shanghai Zeguo, now down 10 yuan / ton, East China Hangzhou rain, now stable.

Deal: despite the rain disturbance in the middle and lower reaches of the Yangtze River, the demand for beauty is still varied.

Market mentality: stabilize the owner.

Tangshan billet uplink 20 to 3330 yuan / ton.

Raw material end:

Scrap market prices are mixed: Hebei region, up 20 murals 40%; Shanxi, Anwei, Shaanxi, Henan and Liangguang regions, down 20 Mui 30%.

The price of coke is generally stable.

The price of main coking coal is generally stable.

The spot market price of iron ore port is on the strong side as a whole.

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

This morning, Liantie was weak in trading, and the port spot market quoted prices in early trading basically maintained stability; boosted by the sharp rise in the stock index in the afternoon, the black system turned red as a whole, and even iron rose sharply; and the quotations of some merchants in the spot market were raised by about 10 yuan / ton. The transaction in Tianjin is OK, and the steel mills actively purchase as needed. The wait-and-see mentality of steel mills in Shandong and Tangshan is strong, and the overall transaction is general. The turnover of PB powder in Shandong area is about 775 yuan / ton, and that of PB powder in Tangshan area is about 785 yuan / ton, which is basically stable compared with last Friday. In view of the recent iron ore supply side continues to increase, and Tangshan production restrictions tightened again, most steel mills low inventory strategy to maintain; superimposed river area affected by heavy rainfall, weakening terminal demand led to a slight decline in iron ore procurement. In the short term, the price of imported ore may be mainly arranged in a narrow range. [SMM Steel]

2. Futures:

RB2010 main contract: a substantial reduction in positions between 3603 and 3630 in horizontal volatility, closing at the end of 3618.

HC2010 main contract: a sharp reduction in positions between 3586 and 3624 within the day, with a strong shock, closing at the end of 3605.

Iron ore i2009 main contract: within the day between 740 to 760 wide strong shock, closing at 750.5.

Coke J2009 main contract: within the day between 1842 and 1881 to continue to explore the weak shock, closing at the end of 1869.5.

Coking coal JM2009 main contract: within the day between 1185 to 1195 narrow horizontal concussion, closing 1190.5.


< 3 > Forecast for tomorrow:

1. Spot aspect: maintain strong operation.

2. Futures:

RB2010 main contract: concussion between 3600 and 3670.

HC2010 main contract: concussion between 3580 and 3650.

I2009 main contract: concussion between 745 and 770.

J2009 main contract: concussion between 1850 and 1930.

JM2009 main contract: concussion between 1160 and 1200.

3. Spot operation tips: the implementation of the author's recommendations, the low part of the appropriate amount of replenishment of inventory profit-taking.

4. Futures operation suggestion

Thread, hot coil: the main rolling operation is to maintain high throwing and low suction in the range.

Iron ore: the rolling operation of high selling and low suction is the main operation in the range, and the single drop is less than 730 stop loss.

Coke: the rolling operation of high selling and low suction is the main operation in the range of activists, the multi-order effectively falls below 1850 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: pressure level 3680.

HC2010 main contract: pressure level 3670.

I2009 main contract: pressure position 772.

J2009 main contract: pressure level 1900, 1950.

JM2005 main contract: pressure level 1200.


< 4 > Information and heart words.

1. National Railway Group: in the first half of the year, the national railway fixed asset investment reached 325.8 billion yuan, exceeding 3.8 billion yuan in the same period last year, an increase of 1.2% over the same period last year.


2. The agency predicts that the CPI growth rate in June may be suspended.

A number of economic and financial data for June will be released in the near future. Under the background of the effective control of the epidemic situation of new crown pneumonia in China, the continuous resumption of work and production, and the gradual strengthening of counter-cyclical adjustment of macro policies, the industry generally predicts that CPI may be suspended in June, and the follow-up trend will be gradually repaired as the epidemic calms down; the year-on-year decline of PPI narrows; the scale of new credit and new social finance remains unchanged; imports and exports continue to recover, and the monthly improvement trend of foreign trade data is expected to continue.


3. China Union of things: it is expected that domestic demand will have a significant pulling effect on the commodity market in the later period.

According to the website of the China Federation of Logistics and Purchasing, the supply of the domestic commodity market continued to increase in June, the decline in demand slowed, the signs of oversupply in the market further highlighted, there was a backlog of commodity inventory, and the characteristics of the off-season began to appear. On the whole, the pattern of strong supply and weak demand in the domestic commodity market was basically established in July, and the downward pressure on the market increased significantly. However, under the sustained domestic economic recovery and the country's continued "capital release" policy dividend, it is expected that the domestic market demand will continue to recover in the later period, which will have a significant pulling effect on the domestic commodity market.


4. [the water level of the main stream of the middle and lower reaches of the Yangtze River continues to rise, and the section from Jianli to Jiangyin will be overwarned in an all-round way] affected by the continuous heavy rainfall, the incoming water from the two lake systems and the middle and lower reaches of the Yangtze River has obviously increased. Under the superimposed influence of the above incoming water, the water level of each station in the middle and lower reaches of the Yangtze River continued to rise, and the Lianhuatang Station reached a warning water level of 32.5 meters at 5: 00 on the 5th. The hydrological department predicts that the Jianli-Jiangyin section of the middle and lower reaches of the Yangtze River will fully exceed the warning water level in the next few days, with a maximum range of 0.5 to 1.0 meters. 10:00 on the 5th, the Hydrology Bureau of the Yangtze River Conservancy Commission continued to issue a yellow warning for floods in the Jianli-Jiangyin section of the mainstream of the Yangtze River, drawing the attention of relevant units and the public along the middle and lower reaches of the Yangtze River, Dongting Lake and Poyang Lake to prevention. [SMM Steel]


5. Price adjustment of No. 3 Steel: all varieties of building materials will not be adjusted from 00:00 on July 6, 2020, and the guidance price will be rebar 3950 / high-speed wire 4030 / snail 4130 from 00:00 on July 06, with no adjustment of monthly discount. [SMM Steel]


6. Although the rain affects the continuation of the demand, the demand is very resilient. Once the rain disturbance is over, the return period of the demand can be expected later. The production limit of environmental protection in Tangshan area becomes stricter, and the output reaches its peak in stages. The probability of falling back is large, and the future steel is based on a small base difference. It has to be caught up with the spot, and the probability of running into a strong shock in the short term is large (the rut space is limited). With the improvement of the macro environment, the stock market rebounded to a new high this year, and the cyclical bull market was characterized by a strong support for the bottom of the black system. The seasonal impact on the limited demand for stone coke is gradually drifting away, focusing on more opportunities in the distant month; the epidemic in Brazil is likely to worsen in the fourth quarter, especially in iron ore long-month contracts. In short, the author's point of view remains unchanged, macro direction, basic plane dimension, general direction rebound is still walking on the road …. No, no.


The heart comments of the week are attached.

In terms of finished products

The gap between strong expectation and weak realization is strengthened. Today's futures steel rose sharply, the spot rose slightly, and the cash spread converged sharply. Take the three types of brands in Shanghai as an example, the spot price of futures is more than 30 yuan / ton, and in the case of Shanghai Shagang brand, the spot discount of futures is less than 80 yuan / ton. The original sin is that the spot is more focused on the static reality, that is, the short-term output is high, the rain in the south affects demand, and the superimposed market "fortune-telling" disturbance. Normally speaking, Fuzhou Steel is the deduction of expectations, that is, the dynamic changes of industry output, demand and inventory. From the main road to the middle: macro direction, industry dimension. Whether the truth is put aside for the time being, but after N times of practice, at least there is a good chance of winning.

The main factors affecting the operation of the market next week include, but are not limited to:

First, parts of the south continue to rain, the impact of high-temperature weather is unharmed (the author has said, I will not repeat it).

Second, the examination of life (July 7, 8 college entrance examination) will affect the construction, but it is very limited.

Third, how big is the actual "rainfall" of environmental protection production restrictions in Tangshan area.

Fourth, whether the macro environment continues to strengthen, the author tends to think that we should not dream too much in the short term.

Fifth, to what extent the output converges, we should pay attention to the hot coil varieties of rebar blast furnace hot metal.

The sixth is the intensity of demand recovery in the areas where the rain is different from the sunny day.

Seventh, the problem of funds affects the life of the construction.

Raw material side.

Scrap: with the decrease of the operating rate of independent electric arc furnace and the decrease of the proportion of scrap addition in long process, the production capacity converges in stages, and the scrap price is still under short-term pressure.

In terms of coke: the fundamentals are still healthy, and coke enterprises are highly motivated to produce (unlimited nonsense). ), but the core is the low inventory of coke enterprises. It is said that the market thinks that the seventh round rise has peaked and fell back (I do not agree). At present, we are considering the delivery routine "moisture" at least 150 yuan / ton coke discount, that is to say, the disk price has already reflected three rounds of increase and decline, looking forward to the replacement of new production capacity (referring to crude steel output), long and short risks and opportunities should be measured!

Iron ore: production restrictions on environmental protection in Tangshan area will of course have a negative impact on iron ore demand, the author believes that no matter how the impact will not hurt the overall situation, the overall situation of high demand is not only unharmed but also higher. The supply-side hard core is still the epidemic of mining countries exported to China, such as Brazil, India, Mexico, South Africa and so on. Short-term inventory fluctuations should not be too troublesome, containing too much "water". No, no. In short, iron ore short-term recovery space is very limited, hope more empty and go and cherish.

In short, the author's point of view remains unchanged: the general rebound is still on the way. No, no. There are only many battles on the road to rebound.


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




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