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[SMM Weekly Outlook] this week the black series strongly pull up the whole next week or maintain a high concussion.
Jul 12,2020 13:53CST
[SMM Weekly Outlook: black is strong to pull up next week or maintain high volatility] by Friday's close, iron ore was at 820 yuan / ton, up 3.73%; thread at 3734 yuan / ton, up 1.19%; hot volume at 3740 yuan / ton, up 1.16%.
The content below was translated by Tencent automatically for reference.

SMM7 March 12: this week, the black department opened low and walked high. At the beginning of the week, the rainy weather in South China continued, but Fengrun District of Tangshan issued an emergency notice to further tighten production restrictions to boost steel prices, followed by a rise in iron ore in the middle of the week. Iron ore is also low and high this week, and even broke through 800 points in intraday trading. On the one hand, due to the decline in shipments from Australia and Pakistan, imports have tightened and boosted futures prices. SMM tracking data show that the last phase of the arrival of cargo is expected to be 15.79 million tons, the arrival volume decreased by 400000 tons compared with the previous period, and the month-on-month decline in Shandong area is relatively large. On the other hand, the news spread in the middle of the week that Brazilian President Bosonaro had tested positive for the new crown virus, and the local outbreak triggered supply concerns. By Friday's close, iron ore was up 3.73% at 820 yuan / ton, thread at 3734 yuan / ton, up 1.19%, and hot coil at 3740 yuan / ton, up 1.16%.

Iron ore is expected to remain volatile next week. As of July 10, inventories at 35 ports tracked by SMM had increased by 760000 tons compared with the previous week, while the average daily dredging volume of ports increased by 3000 tons month-on-month to 2.866 million tons. From a fundamental point of view, although iron ore port inventory is accumulated again, but the dredging volume is on the rise, indicating that the demand for iron ore is better. And according to SMM consulting steel mills learned that the current round of production restrictions are once again less than expected. The profits of steel mills have widened recently, and the power of replenishment of steel mills has been enhanced. In addition, the month-on-month decline in the freight volume of Australia and Brazil in the current period has supported mineral prices.

Hot volume production may continue to increase next week, increasing supply pressure in the north and south of China. On the demand side, although the overall growth rate has slowed down, it is still picking up steadily, and the fundamentals are showing signs of weakness compared with the previous period. However, the current market mentality preference is expected to maintain a high volatility trend next week.

The current supply and demand of threads is stable, market sentiment has eased, and the overall spot fundamentals of rebar are in the improving stage. But in the short term, after this week's strong rally, the market still needs time to digest the increase, coupled with the fact that rain and high inventories still suppress demand in most areas, and there is a certain time gap between the realization of reality and strong expectations. spot prices are likely to enter the consolidation stage, the upper and lower space is relatively limited.

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