SMM News: affected by the continuous heavy rainfall and the superposition of upstream water, the water level of rivers in many provinces in the south has skyrocketed, and the situation of flood control is very grim. From 6: 00 on the 11th to 00: 00 on the 12th, the water level of four hydrological stations exceeded the record high in 1998!
According to the news released in Poyang on the evening of July 11, as of 21: 00 on the evening of 11 July, the water level of Raohe Poyang Station broke through the 1998 historical extreme value of 22.61 m, reaching 22.65 m, 16 hours ahead of forecast and will rise.
16:00 on July 12, the water level at Poyang Lake Hukou Station was close to the guaranteed water level of 22.50m. According to the relevant provisions of the National Emergency Plan for Flood Control and drought Relief, the State General Administration of Flood Control decided to upgrade the emergency response from level III to level II, and issued a notice to the relevant areas requiring close monitoring of changes in rainfall and flood conditions, timely adjustment of emergency response levels, and strengthening the implementation of various measures for flood control, flood fighting, rescue and disaster relief. Ensure the safety of people's lives and do our best to reduce disaster losses. The State General Administration of Prevention and Emergency Management sent working groups and expert groups led by ministerial leaders to Jiangxi and other places to direct flood control and disaster relief work.
On the 12th, the State Defense Office, the Ministry of Emergency Management and the State Grain and material Reserve Bureau allocated disaster relief materials to Jiangxi, Guizhou and Hunan provinces. 1900 FRP assault boats, 3000 tents, 10000 folding beds, 10000 blankets and 20000 towel quilts were allocated to the Jiangxi emergency organization; 1000 tents, 10000 quilts, 10000 blankets and 3000 folding beds were allocated to the Guizhou emergency organization; and 1000 tents, 2000 folding beds and 5000 towel quilts were allocated to the Hunan emergency organization to support local flood fighting and rescue work.
As of 12:00 on July 12, since the beginning of this year, floods have affected 37.89 million people in 27 provinces (autonomous regions and cities), including Jiangxi, Anhui, Hubei, and Hunan, with 37.89 million people dead and missing, 2.246 million emergency resettlement, and 1.258 million people in need of emergency living assistance; 28000 houses have collapsed; the affected area of crops is 3532 thousand hectares; and the direct economic loss is 82.23 billion yuan.
According to reports, according to the real-time hydrological monitoring and forecast analysis of the Hydrology Bureau of the Yangtze River Water Conservancy Commission of the Ministry of Water Resources, at 14:00 on July 12, 2020, the water level at Lianhuatang Station, the main stream of the Yangtze River, has reached 34.34m, and the flood peaks in the middle and lower reaches of the Yangtze River are passing through the Chenglingji section of the River.
The average precipitation in June this year is 13.5% higher than that in the same period of the usual year, and the level of flood control has been improved in many places. the water level of key rivers is higher than the ten-year average, and the number of over-warning rivers reached 250 in June. What is the impact of torrential rains over the past few days on commodity futures?
What is the impact of the increasingly severe flood on commodity futures?
Xie Wen, an agricultural product analyst at the CUHK Futures Research Institute, told reporters that the impact of heavy rainfall on agricultural products is, first, causing stagnant water in the fields and affecting crop growth; second, hindering normal transportation, or increasing transport costs; and third, fish farming.
"from the area where the heavy rainfall is distributed, the variety that has a great impact on crop growth is rice. Early rice is in the booting and fruiting stage when the rainstorm breaks out, and the probability of plant death is high when it is submerged for more than 48 hours. However, China's grain depots are abundant, and rice can be replanted after flood return, which has a limited impact on the overall grain price. " Xie Wen said.
It is reported that corn in Heilongjiang suffered from low ground temperature before sowing in April, and the soil continued to be too wet in May / June after sowing, resulting in torrential rains and floods in many places. Some spring corn planting areas have been changed to soybeans, and the growth suitability index of soybeans is at an all-time high recently. Planting subsidies superimposed weather effects, we estimate that the Heilongjiang region may reduce corn production by 60-8 million tons this year, and soybean production may increase by 196-2.61 million tons after conversion. Follow-up attention to the effect of accumulated temperature on the quality of corn and soybean since the planting period.
In addition, as the flood situation mainly occurred in the middle and lower reaches of the Yangtze River, a certain proportion of fish farming in these areas affected the consumption of rapeseed meal. In addition, the imported granular meal and imported sunflower meal of rapeseed meal this year were higher than those of the same period in previous years. The price trend of rapeseed meal may be weaker than that of soybean meal.
In Xie Wen's view, the torrential rain has had a certain impact on the transportation of live pigs. Since the beginning of the main flood season in June, some southern pig farms have been flooded and the roads have been blocked, which has affected the speed and transport volume of the north-south pig transfer. Coupled with the hot weather, the loss of long-distance transportation of live pigs has increased, the difficulty of epidemic prevention and control has increased, and the north-south pig transfer has decreased. Pig prices may remain high in the short term due to the reduction of seasonal supply, restrictions on imported pork, transportation affecting part of the supply and other factors.
Li Yanjie, a researcher from the Energy and Chemical Industry Department of CITIC Construction Investment Futures, told reporters that the recent torrential rain in the southern part of the country is still continuing, and the scope of influence is likely to expand. According to the latest weather forecast of the Central Meteorological Observatory, there are heavy to torrential rain in the north and southwest of Yunnan, and the rainy weather in Xishuangbanna, one of the main producing areas in China, has also increased, so that the local output of new rubber has not yet been released, and the increase in rubber supply is limited in the short term. Although the supply side is slowly affected by the rainy weather, this does not mean that rubber prices are bound to rebound, mainly because the current rubber demand-side performance, especially the tire market performance is still relatively low. It is worth noting that eastern Shandong also appeared in the rainstorm warning on July 12. As Shandong is an area where domestic tire production is concentrated, if the rainstorm persists, it will further affect the overall start of tire construction, which in turn affects the performance of rubber demand. Overall, the short-term natural rubber price will continue to be dominated by low-level oscillations, and the recovery of foreign trade in the later stage and the continuation of the recovery of the automobile market will be the key factors to determine the rubber price.
"the black trend, especially the rebar trend is obviously affected by seasonal factors, the annual plum rainy season is considered to be the traditional off-season, the rebar trend is bound to face some pressure. Since June this year, there have been six torrential rains in the south, which is higher than that of the same period in previous years and lasts for a long time. For the severely affected areas, especially in Hubei, Jiangxi, Anhui, Zhejiang, Jiangsu and Hunan provinces, the progress of downstream construction is bound to be affected, including transportation and other aspects will bring difficulties. " Lin Na, an analyst at China Steel Network, told reporters that since late June, rebar has changed from storage to accumulation, the release of demand has obviously slowed down, the pressure of accumulation has increased, and it is uncertain whether plum can be produced in the middle of July this year. According to the forecast of the Central Meteorological Observatory, there is still a round of heavy rainfall in the middle and lower reaches of the Yangtze River and the north of the Yangtze River from July 15 to 17. However, this year is also a relatively special year, in addition to considering seasonal factors, we also need to take into account the lagging changes in demand for work under the epidemic. Black has recently seen a rebound, which is mainly due to the market's confidence in the release of demand for work in the future. in particular, with the increase of major infrastructure investment projects, the high expectations after Meiyu have taken the lead. Therefore, the overall support of the black system is still strong, even if the short-term impact of torrential rain, demand resilience is still there, steel prices do not have room for a sharp fall, but will show a phased rebound because of high expectations. However, the fundamental pressure will make the rebound height relatively limited.
Nonferrous rose in an all-round way, and Shanghai copper reached a new high for the year.
Last week, the non-ferrous sector rose across the board. Shanghai zinc rose by 6%, while Shanghai copper stood at the 50000 yuan / ton mark, and the price hit a new high for the year. Shanghai Aluminum is also approaching the 15000 yuan / ton mark. Market sentiment peaked in Friday night trading, with several major varieties of copper, aluminum and zinc all up more than 2%.
"the launch of this round of market is essentially the moneymaking effect of the stock market to improve the risk appetite of the whole market and further stimulate the market's reflection on macro fundamentals." Huang Yan, a researcher on non-ferrous precious metals in founder medium-term futures, said that since July, the domestic stock market has begun to rise in volume, and last week it was even more powerful. The Shanghai Composite Index broke through 3400 points, bringing a strong money-making effect, and the market began to rethink the fact of "macro recovery." Investment guru Soros has a famous "reflexive" view, that is, when market prices also determine fundamentals to some extent. In the most recent week, there has been a surge in talk of macro recovery, asset shortages and liquidity spillover, and it is such a strong rally that has given the market stronger confidence, but also Friday's stock market correction has also led to a sharp shift in some views. for example, fears that the economic recovery is not as expected and the recurrence of the second US-led epidemic is the strongest example of "reflexivity".
In Huang Yan's view, such confidence repair is particularly important for the non-ferrous plate, which is characterized by large unit contract value, easy preservation of the target, and high correlation between internal and external varieties, so it can be said to be the most sensitive to the macro aspect. theoretically, it is the most sensitive to macro recovery, but it is more hesitant in this round of long market resonance.
It is understood that recently, the non-ferrous bulls have suffered a series of heavy losses, and the degree of risk appetite has greatly decreased, thus generally maintaining the bear market thinking, which is easy to fall but difficult to rise on the market. Optimism in the lead-zinc sector began last Wednesday when Teck Resources, a large international miner, announced that delivery of lead-zinc mines would be delayed by about a month.
"the moneymaking effect, the problem of excessive liquidity and confidence in the domestic economic recovery will continue to improve the risk appetite of the domestic market, and the pattern of internal strength and external weakness will continue. The performance of copper and aluminum may be weakened under the continuous rising effect of copper and aluminum, but zinc will rise in the repressive atmosphere of long-term downward, and the final increase may exceed market expectations, and the elasticity of varieties of nickel and tin determines that it will continue to be active in the follow-up link. The main risk point is whether a better-than-expected correction in overseas stock markets will bring down the moneymaking effect. " Huang Yan said that among the non-ferrous varieties, silver and zinc are highly related, and their performance is very similar, that is, the vast majority of investors think that silver will rise, but they lack the courage to take the initiative to be long, mainly because the bulls were seriously injured in the market in February and March. However, judging from the market reflection on Thursday and Friday, silver showed some signs of breakthrough, and a large amount of funds immediately entered the market, but broke through the unconfirmed Friday. Most of the long positions increased by silver on Thursday have been withdrawn, and it is actually very difficult for this cautious market to fall deeply, and it is expected that there will be a big long market in silver in the future.
Gold futures hit a new high in nearly 9 years, can it continue to rise in the future?
Last week, spot gold in London successfully topped $1800 an ounce, its highest level since October 2011. Zhan Dapeng, a senior analyst at Everbright Futures Precious Metals, believes that there are two reasons why funds continue to be bullish on gold. First, due to the impact of the epidemic, real interest rates in the United States are expected to continue to weaken, and even if the economy is repaired, it will first raise inflation expectations rather than interest rate hikes. The logic is somewhat similar to that after 2009, when it is not directly related to the Fed's QE purchases, but is supported by purchases, and gold is propelled by inflation expectations after the economy recovers after the release of money. Second, the trend of the US dollar is not obvious and the attractiveness of US long-term bonds is declining, and the contradiction between the US dollar and US bonds and the stock market which deviates from fundamentals also force funds to increase the allocation of gold.
The reporter found in the interview that the bullish sentiment formed by the bullish trend in gold also makes investors pursue gold very high, as can be seen from the heat of the continuous increase in gold ETF positions and the sharp increase in total positions in CFTC gold and non-commercial long positions. In addition, silver ETF positions increased rapidly, indicating that the market is still looking at the potential replenishment expectations of silver after the gold breakthrough.
"in terms of trend, excluding the deep V trend at the beginning of the year, gold has been oscillating upward, with an increase of 23% from the low to the current position. Technically, it is already a bull market, before the obvious inflection point event is seen. Gold will still oscillate upward repeatedly. In 2019, gold rose 21%, with an amplitude of 30%. In 2020, the increase has reached last year's level, but if the amplitude reaches 30%, the high point will be around 1900 US dollars per ounce. " Zhan Dapeng said.
Huang Yan told reporters that the main reason for the rise in gold is the increase in ETF investors in the United States, as well as the bullish effect of gold options. In fact, the vast majority of investors allocate gold to optimize the yield curve when they hold US stocks or commodity bulls, while others look at the rising trend of gold to make speculative or anti-inflationary gains. Gold and risk assets are likely to move in the same direction, so watch out for a market resonance correction in March. In addition, the current space above gold is difficult to define, may lack the performance-to-price ratio of investment, dare to buy a deep fall is the core logic, but the current price is difficult to be attractive. Gold fluctuates widely at $1700 / oz in the afternoon, and virtual options may become a key factor for follow-up investors to make a profit.
As consumption picks up, the black department is expected to rise in the future?
Last week, thread transactions showed a strong rebound, apparent consumption picked up, spot mood improved, the superimposed rainy season is about to pass, late demand is still expected. Shanghai thread prices rose to 3630 yuan / ton, Tangshan billet rose to 3390 yuan / ton, futures 10 contract basis shrank to flat.
It is reported that the production limits of Tangshan and Xuzhou steel mills have been suspended, the East China electric furnace is in a state of loss, and the output of building materials has dropped slightly. Demand side, the southern region is about to plum, downstream business transactions have rebounded, but then is about to usher in high-temperature weather, transactions still have bottlenecks.
"in the short term, there is a slight improvement in supply and demand, narrowing inventory growth, flat basis, strong thread oscillation and pressure above. In the medium to long term, the market is still fluctuating in the seasonal range, and demand is the key. The peak season will push up the high in the second half of the year and fall back in the off-season. The lower 3000mer 3300 range is supported, and the top depends on the quality of demand, while being suppressed by the normalization of high supply. If you want to break through 3800 points, you need demand higher than expected (real estate policy) or supply restrictions exceeding expectations or sudden risk events at the charging end. " Li Pengchao, a black researcher on western futures, said.
"Coke spot is in the lifting cycle. Last week, the quasi-one price of Tianjin Port fell to 2050 yuan / ton. The futures 09 contract rebounded slightly with the thread, and then fell back again as the fundamentals turned loose. At present, Jinshan Iron and Steel is preparing for a second round of lifting and lowering. Coke high base difference will be repaired by spot decline." Li Pengchao said.
The reporter learned from business personages that steel mills in Tangshan and Xuzhou stopped production limits, resulting in low timber profits and spontaneous production reduction and maintenance, and hot metal output fell back. On the supply side, Shandong Coking Company failed to further implement the policy of fixed coke by coal, and the high profit of metallurgical coke stimulated the production of chemical coke and the production of chemical coke, and the output of coke increased slightly. The supply and demand pattern turned loose, the inventory structure deteriorated, the inventory of coke enterprises began to accumulate, and the inventory of mainstream steel mills was higher and the arrival of coke in the plant was controlled.
In the view of Li Pengchao, under the short-term loose pattern, high valuation repair is the main logic of disk trading, and the coke period is expected to oscillate weakly in July and August. In the medium term, the peak season factors promote the return of demand, and it is still possible to ferment the policy of fixing coke with coal in Shandong area. at that time, tight supply and demand is the main logic of the market transaction, and more coke is built on every bargain.
It is worth noting that last week, the port and producing areas of coking coal prices are stable, Changzhi injection coal prices rose 30 to 730 yuan / ton, futures 09 contract rebounded with coke, the trend is stronger than coke.
It is reported that the strength of the coal mine safety inspection policy is limited, production continues to pick up under the stimulation of high profits, and the import of Mongolian coal is stable. The number of vehicles passing through customs at the 288 port is maintained at about 500mure 600. Affected by the Nadam Congress in the short term, the port is expected to be closed for five days (expected July 11-15), and the import of Mongolian coal decreases slightly. In addition, the clearance quota of the northern port is insufficient, and the customs clearance time is on the long side, although the import price gap still exists. However, the import volume of Australian coal has shrunk compared with the previous period. On the demand side, the coking plant has high profits and the coke output is high in absolute value. The total inventory of coking coal samples continues to rebound and the fundamentals are loose, but under the situation of active replenishment of downstream enterprises, the inventory structure has improved, coal mine inventory has been transferred to coking plants and steel mills, and spot prices remain stable.
"under the influence of Nadam Congress, the mood on the disk is strong, and the trend of coking coal follows coke, but it is stronger than coke. But in the medium and long term, the supply of coking coal is high, the downstream coke has a coke policy based on coal, and the profits of coke enterprises decline in the later period, the pace of replenishment will also slow down, the loose situation of coking coal will not change, prices are under pressure, mainly selling short every high. " Li Pengchao said.
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