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[SMM Metal Breakfast] Rio Tinto copper and iron ore shipments increase * inventory surge lead price surge * Xinjiang metal silicon transport capacity tightening
Jul 21,2020 07:15CST
[SMM Metal Breakfast] Rio Tinto's capital expenditure has soared, although there is an epidemic, but the company's copper equivalent, Iron ore shipments are still growing * inventory of electrolytic aluminum increased by 4000 tons to 712000 tons compared with last Thursday * inventory surge lead prices supply loosening consumption drag inventory will still increase * nickel and stainless steel prices have wide volatility space the center of gravity in the second half of the year as a whole is higher than that in the first half * the supply and demand pattern of high-carbon ferrochromium is expected to improve significantly at the end of the year * the transport capacity of metal silicon in Xinjiang is tightening * Brazilian Iron and Steel Co., Ltd. The company has entered into a $115 million iron ore supply contract with Glencore.
The content below was translated by Tencent automatically for reference.

"[overnight market] the metal market is more popular, the US stocks closed higher, and the epidemic situation increases the risk aversion mood of precious metals.

"Today's financial data outlook: pay attention to the minutes of the RBA monetary policy meeting in July and the US API crude oil inventory data in the early morning of the next morning.

"China Nickel-Chromium stainless Steel Industry Market and Application Development Forum has successfully concluded and received as soon as possible!

Today's focus

[Rio Tinto's capital expenditure surged despite the epidemic, but the company's copper equivalent and iron ore shipments still increased] the Rio Tinto Group recently released its second-quarter results, which are expected to be about $6 billion in 2020 due to the appreciation of the main operating currency against the dollar. capital expenditure was previously expected to be $50-6 billion, and capital expenditure is expected to be about $7 billion a year in 2021 and 2022, compared with $6.5 billion previously. Overall, Rio Tinto achieved strong production results despite the outbreak and the earthquake in the Kennecott copper mine in the US. "View details

[inventory of electrolytic aluminum in Leiku increased by 4000 tons to 712000 tons compared with last Thursday] on July 20, SMM counted the domestic social inventory of electrolytic aluminum (including SHFE warehouse receipts): 112000 tons in Shanghai, 21.9 tons in Wuxi, 99000 tons in Hangzhou, 39000 tons in Gongyi, 177000 tons in the South China Sea, 57000 tons in Tianjin, 5000 tons in Linyi and 4000 tons in Chongqing. Consumer stocks of aluminum ingots totaled 712000 tons, an increase of 4000 tons from last Thursday. "View details

[SMM analysis: inventory surge lead price surge supply loosening consumption drag on inventory will still increase] since May 8, the social inventory of lead ingots has opened the accumulation model. As of July 17, the total inventory of lead ingots in the five places reached 47700 tons, an increase of 29900 tons compared with May 8. Lead prices have erased a wave of gains since July 7 under the pressure of a receding stock boom and rising stocks of lead ingots. SMM believes that at present, due to the decline in lead prices, and waste battery prices remain high, recycled lead smelters maintain a capital preservation state, recycled refined lead stickers have shrunk, refineries show cherished sales sentiment, some just need to return to the primary lead, but the primary lead enterprises are overhauled and returned to normal production, and downstream consumption is afraid of falling cautiously, it is expected that the social inventory of lead ingots will continue to rise this week. "View details

[SMM seven places zinc ingot social inventory fell 1600 tons compared with last Friday] according to SMM, inventory in seven places recorded a slight decline over the weekend, mainly in Shanghai, Tianjin and Zhejiang. In Shanghai, due to floods in many places in China, affecting the pace of arrival, coupled with the small inflow of imported zinc, inventories continued to decline; the market in Guangdong remained high, but the price drop on Friday boosted downstream replenishment sentiment, with little change in inventory; in the lower reaches of Tianjin, there was an increase in bargain purchases and a slight decline in inventories. Overall, the original inventory in Shanghai, Guangdong and Tianjin fell by 2300 tons, while the inventory in seven places across the country dropped by 1600 tons.

[SMM: nickel and stainless steel prices have wide volatility space. The overall center of gravity in the second half of the year is higher than that in the first half] SMM expects nickel and stainless steel prices to have wide volatility space, ferrochromium prices are relatively stable, and the price center of gravity in the second half of the year is higher than that in the first half. Quarterly balance sheet: with the increase in the amount of ferronickel returned to Indonesia, the balance sheet of domestic primary nickel supply and demand gradually tends to be loose, but it will not be worse than in the first quarter; in addition, most of the excess range is still dominated by nickel pig iron imports. the actual performance of nickel price also needs to consider the impact of macro factors on the environment of pure nickel consumption. Annual balance sheet: affected by the epidemic and the rapid commissioning of NPI in Indonesia, the excess supply of primary nickel in China in 2020 is significantly higher than in previous years. "View details

[SMM: by the end of the year, the surplus of high-nickel pig iron will reach 38000 nickel tons. It is difficult for prices to rise in the third and fourth quarters. China's NPI production increased to 580000 nickel tons in 2019, with the decline of high profits and environmental impact, superimposed by the increase in the release of new capacity, a year-on-year growth rate of 28%. After Indonesia's mining ban took effect in 2020, China's NPI fell into a shortage of raw materials. Based on the current capacity survey, it is estimated that China's NPI production will drop sharply to 490000 nickel tons. "View details

[the supply and demand pattern of SMM: high-carbon ferrochromium is expected to improve significantly at the end of the year] the supply and demand of high-carbon ferrochromium increased significantly in 2019. The total supply of domestic and imported high-carbon ferrochromium was 9.1064 million tons, an increase of 14.25% over 2018. China's consumption of high-carbon ferrochromium in 2019 was 8.6427 million tons, an increase of 8.91% over 2018. Under the original surplus of high-carbon ferrochromium, the growth rate of high-carbon ferrochromium was still higher than that of consumption, and the oversupply increased. There was a surplus of 268400 tons of high-carbon ferrochromium in the whole year, an increase of 187.67 per cent over 2018. [reprint needs to retain provenance-Shanghai Nonferrous net] [Summit] the supply and demand pattern of SMM: high-carbon ferrochromium is expected to greatly improve https://news.smm.cn/news/101204689 by the end of the year.

[SMM: is expected to supply loose domestic stainless steel costs in the second half of the year.] Raw material end: at present, in terms of the use of nickel raw materials in stainless steel plants, high nickel iron accounts for a relatively large proportion, while the supply of nickel iron is expected to be loose in 2020, so it is difficult for prices to strengthen in the third and fourth quarters, but due to the support of mineral prices, the weakening range is limited, and high nickel iron prices are weak and fluctuating. Due to the influence of the high decline of chromium ore in the second half of the year, the price of ferrochromium is expected to show a slight downward trend, so the cost of domestic stainless steel may decline to a certain extent. Supply and demand side: in the second quarter, some steel mills have resumed production, and domestic stainless steel production has gradually increased; Indonesian stainless steel production has been accelerated, and the return quantity has increased gradually, and the supply of stainless steel has increased; while the demand side has experienced a concentrated outbreak in March, gradually returning to dull, the demand growth rate is not as fast as supply, and the supply is still in a loose state in the second half of the year. "View details

[SMM analysis: it is difficult to change the high price pattern of iron ore with increasing port inventory] the inventory of 35 ports tracked by SMM in this period totaled 102.9 million tons, an increase of 1.48 million tons month-on-month and a decrease of 4.2 million tons compared with the same period last year. In this period, the increase in the inventory of imported mineral ports expanded, and the month-on-month growth of Shandong and Tangshan main ports showed an increasing trend. At the same time, the average daily dredging volume of the port fell by 55000 tons to 2.811 million tons compared with the previous month. Most steel mills continue the on-demand procurement strategy, leaving Hong Kong for a short-term or difficult to see a substantial increase. Although the last period of SMM statistics of iron ore arrival decreased slightly compared with the previous period, there is still a pressure on the port in some ports, and the inventory of imported ore ports is still expected to continue to increase in the later period. "View details

[metal silicon transport capacity in Xinjiang is tightening] according to SMM, since the implementation of strict control in Urumqi, Xinjiang last Friday due to the impact of the epidemic, there has been a reduction in the number of motor vehicles and a slight increase in freight rates.

[SMM analysis: there is a strong positive price atmosphere for electrolytic manganese under the purchase depression at the beginning of the week] on July 20, the spot ex-factory price including tax in the mainstream area of the manganese triangle was around 9800 Mel 10,000 yuan / ton, which was temporarily stable compared with the average price last Friday; the spot ex-factory price including tax in Guangxi was around 9900Mel 10100 yuan / ton, which was the same as last Friday's market price. At the beginning of this week, the spot quotation for electrolytic manganese was concentrated at the 10,000 yuan mark, a slight increase of 100 yuan / ton compared with last week, but according to some operators, there is a willingness to reduce prices in terminal purchases, it is difficult to find low-price supplies from manganese factories, and the game between supply and demand in the market is prominent. there is limited room for short-term manganese prices to rise and fall. In addition, last week 200 series hot rolling social inventory is too much, this week market turnover is weak, hot rolling market price is slightly weaker; 201 cold rolling depot effect improved, but the later market price adjustment still needs to wait and see the actual supply and demand changes, SMM short-term forecast 200 series steel prices as a whole stable and weak finishing.

[SMM 20 July Electrolytic Cobalt spot Express] the current mainstream market price is 23.2-247000 yuan / ton, the average price is the same as the previous working day. Overseas summer demand continues to be in the doldrums, electrolytic cobalt prices still have room for a slight decline; domestic electrolytic cobalt prices have no market, and demanders still have a little stock of raw materials, wait and see, and purchase sporadically; some traders have increased demand for hoarding goods, and a small amount of spot transactions. The supply of cobalt raw materials in Africa is not optimistic, the demand for electrolytic cobalt is still low, the capital inflow of all parties has increased recently, and the price of electrolytic cobalt has warmed up a little, but the price pull up is weak, and the domestic spot price of electrolytic cobalt is expected to rise slightly.

[Zhangyuan Tungsten Industry released long order quotation for the second half of July 2020] by Chongyi Zhangyuan Tungsten Industry Co., Ltd., the quotation for the second half of this month is as follows: 1, wolframite concentrate (WO3 ≥ 55%): 79500 yuan / standard ton; 2, scheelite concentrate (WO3 ≥ 55%): 78000 yuan / standard ton; 3, ammonium paratungstate (national standard zero): 123500 yuan / ton. Note: the above unit price includes 13% VAT. "View details

Important news of metals and industry

[Anglo American copper production rose 5 per cent year-on-year in the second quarter] Anglo American copper production totaled 166800 tons in the second quarter, up 5 per cent from a year earlier, according to the Anglo American report. Although the Los Bronces copper mine was affected by water shortage and its production was lower than expected, the performance of the Collahuasi copper mine was strong. During the reporting period, Los Bronces copper production fell 12 per cent year-on-year to 80700 tonnes, including 9900 tonnes of cathode copper; Collahuasi copper production increased 38 per cent year-on-year to 75700 tonnes (Anglo American has a 44 per cent stake in the mine.), EI Soldado copper production fell 21 per cent year-on-year to 10400 tonnes, mainly due to lower copper grade. The target of copper production for the whole year is 62-670000 tons, which still depends on the availability of water resources and the development trend of the epidemic.

[Chinalco Group Electrolytic Cell Energy Saving Technology has been promoted by the Energy Saving column of the National Development and Reform Commission] recently, the "New steady flow Thermal Insulation Aluminum reduction Cell Energy Saving Technology" developed by Zhengzhou Research Institute, which belongs to Chinalco Group, has been promoted in the "Energy Saving publicity week" column of the National Development and Reform Commission website because of its excellent energy-saving and environmental protection effect. "View details

[Wenshan Aluminum Co., Ltd. built a production line with an annual output of 30,000 tons of aluminum ash for resource utilization] recently, Yunnan Wenshan Aluminum Co., Ltd. has completed a production line of aluminum ash resource utilization with an annual output of 30,000 tons. It is understood that at present, the domestic annual production of electrolytic aluminum is about 38 million tons, and Yunnan is about 5 million tons. Every ton of electrolytic aluminum can produce 13 kilograms of aluminum ash. The completion of the production line can deal with 30,000 tons of aluminum ash and recover 20,000 tons of alumina, indicating that the disposal of aluminum ash in the industry has entered a stage of harmless resource recycling. "View details

[Hechi City annual production of 300000 aluminum alloy lightweight mini-cars project started in Yizhou] on the morning of July 19, the opening ceremony of Hechi City's annual production of 300000 aluminum alloy lightweight mini-cars was held in Luodong Industrial concentration area of Yizhou District. Huagui lightweight mini-car project is located in Hechi Yizhou Luodong industrial concentration area, with a total investment of 5 billion yuan, the project covers an area of 2000 mu, annual production capacity of 500000 vehicles, divided into two phases of construction. The total investment in the first phase is 2 billion yuan, the land is about 1200 mu, and the annual production capacity of 300000 aluminum alloy lightweight mini-cars is designed. "View details

[the listing of zinc-aluminum options provides a grasp for fine risk management] the listing of aluminum and zinc options makes up for the blank of futures hedging strategy and realizes the diversification of risk management tools. Due to the different location of the industrial chain, management objectives and capital characteristics of different enterprises, risk management needs are also diversified, and on-the-floor options will meet the needs of enterprises to a large extent. First of all, futures can achieve trend risk management, while the nonlinear characteristics of options can achieve hedging in a specific range, and the unnecessary hedging cost can be reduced by constructing option portfolios. It provides a tool for refined risk management for enterprises. Secondly, hedging through buying options and paying fixed royalties can effectively avoid the risk of additional margin in futures, take a stable hedge position, and retain the favorable variable income of the spot side at the same time. "View details

[hoisting of the five-way ball on the top of the blast furnace system of the medium Gold Nickel-Iron smelting Project of Liugang] at 17:30 on July 18, the five-way ball on the top of the blast furnace system of the Nickel-Iron smelting Project of China Gold Corporation was successfully hoisted in place, which marked that the blast furnace entered the stage of finishing and perfecting the installation of the furnace top structure. It is understood that the placement of the blast furnace five-way ball is the key node of the blast furnace installation, with a weight of about 40 tons and an installation height of 88 meters. It is an important connecting part of the blast furnace crude gas dedusting, which plays a balanced role in absorbing the thermal expansion of the blast furnace shell and reducing the gas downcomer force. at the same time, a gas release valve is arranged at the highest point of the five-way ball to achieve the purpose of controlling the furnace top pressure and discharging gas during air rest. "View details

[northeast Special Steel Company strengthens production and marketing structure adjustment and operation to achieve counter-trend growth] in view of the impact of the new crown epidemic, under the background of the overall decline of the iron and steel industry, Northeast Special Steel actively adjusts its management strategy in close connection with the current market situation, continuously strengthen the adjustment of production and marketing structure and variety structure, go all out to expand and strengthen high-end products, achieve counter-trend growth in production and marketing of key varieties, and continue to enhance its profitability. Seek new breakthroughs in the face of adversity. "View details

(despite the gradual deregulation of the epidemic, iron ore production in South Africa fell 66.3% in May from a year earlier) although South Africa further relaxed controls in May, many mines have not yet fully resumed production, according to Statistics South Africa. The country's mining production fell 29.8 per cent in May from a year earlier, with iron ore production falling the most, falling 66.3 per cent, manganese production down 45.4 per cent and platinum group metals production down 27.3 per cent. From March to May, South Africa's seasonally adjusted mining production fell by 31.3% from a year earlier. Meanwhile, mineral sales in South Africa fell 13.4 per cent in May 2020 from a year earlier, with negative growth in most commodity sales. "View details

[Shanxi Province issued the 2020 Action Plan for the Transformation and upgrading of Shanxi Iron and Steel Industry] recently, the Shanxi Provincial Department of Industry and Information Technology issued the "2020 Action Plan for the Transformation and upgrading of Shanxi Iron and Steel Industry." in 2020, Shanxi Province focuses on promoting 33 upgrading projects, with a total investment of 32.3 billion yuan, striving to complete an investment of 10 billion yuan that year, and the whole industry to achieve 300 billion yuan in main business income. "View details

[Brazilian steel company signed a US $115 million iron ore supply contract with Glencore] Brazilian steel company (CSN) recently said it had signed a third iron ore supply contract with Glencore. CSN said that its subsidiary CSN Mineracao would supply 4 million tons of iron ore at a price of US $115 million over five years. CSN said the deal allowed flexibility on both sides. The company says CSN can increase supply if needed. CSN said the deal could be completed as long as certain undisclosed conditions were met. "View details

[Wheaton Precious Metals CEO: supply contraction demand continues to be bullish on Silver] Wheaton Precious Metals (Silver Wheaton) CEO Randy Smallwood said in a recent interview that the reduction in investment in base metals has helped push up silver prices. Since silver is a by-product of lead and zinc, the supply disruption caused by the epidemic will reduce the supply of silver, and its price is not at its highest at present. "We spend a lot of time studying base metals, and it is precisely because most precious metals come from base metals," he said. " "View details

(gold production of Colombia's largest underground gold and silver producer fell 17% in the second quarter compared with the same period last year) Gran Colombia Gold Corp., Colombia's largest underground gold and silver producer Gold production in the second quarter totaled 48228 ounces, down 17% from a year earlier, compared with 57882 ounces in the same period last year. In the first half of 2020, the company produced a total of 104475 ounces of gold, compared with 118483 ounces in the same period last year. "View details

[a technology of northern rare earths has reached the international leading level] evaluated by the experts of China rare Earth Industry Association, the overall technology of the project of "continuous production process Research and industrialization of 10,000 ton Light rare Earth Carbonate" has reached the international leading level. The project reduces carbon dioxide emissions by 80%, power consumption by 29%, and waste water by 40%, which can greatly reduce production costs. It is understood that the technical achievements of the project have been successfully applied in a number of large rare earth enterprises, saving more than 100 million yuan in annual production costs.

Macro focus


On July 20, the Shenzhen Stock Exchange announced the gem reform and pilot registration of accepted enterprises. Kefu Medical Technology Co., Ltd. applied for IPO, car testing and two new Meixing enterprises applied for refinancing. As of July 20, a total of 429 enterprises have been accepted for gem reform and pilot registration, including 297 enterprises applying for IPO, 126 enterprises applying for refinancing and 6 enterprises applying for major asset restructuring.

Zhang Bin, director of Shandong State-owned assets Supervision and Administration Commission: since last year, Shandong has made plans for the main business of 28 provincial enterprises and formulated a three-year action plan for the clean-up and withdrawal of non-main enterprises. Those in line with Shandong's eight major development strategies and the top ten industries should be stronger and bigger, and those who lose money, those who lag behind, and those who deviate from the main business should withdraw even if they make money. There are 388 enterprises listed in Shandong's three-year non-main business withdrawal plan, including 110 real estate enterprises.

Central bank: carry out 100 billion yuan 7-day reverse repurchase operation, as 50 billion yuan reverse repurchase expires, the same day to achieve a net investment of 50 billion yuan. The quoted interest rate of July 1-year loan market (LPR) is 3.85%. The quoted interest rate of July 5-year loan market (LPR) is 4.65%, which is the same as that of the previous month.

Shenzhen Stock Exchange: in order to ensure the smooth development of the gem reform and the pilot registration business, the Shenzhen Stock Exchange, in conjunction with China Clearing and China Securities Finance, is scheduled to organize technical online customs clearance and online issuance business clearance tests on July 25, 2020. After the completion of the test, the gem reform and the pilot registration related technical system will be officially launched. Starting from July 27, you can start the online issuance business of gem registered stocks and depositary receipts.


In response to the epidemic, additional unemployment benefits, PPP loans for small and medium-sized enterprises, delayed rental and student loan programs and preferential tax relief measures in the United States will expire in the coming weeks to months.

The US-listed ETF, which invests in Chinese stocks, received $544 million in inflows in the week ended July 17, pushing emerging market funds to record weekly inflows of $624.7 million, the first consecutive two-week inflows since February.

Haldane, chief economist of the Bank of England: as the yield curve of all maturities is close to zero, forward guidance may play a role in maintaining a loose monetary environment.

Terminal information

[Yuebo Power: plans to invest 1.278 billion yuan to build a new energy vehicle power system base] Yuebo Power announcement, the company will build a new energy vehicle power system base in Weinan High-tech Zone, with a total planned investment of 1.278 billion yuan. Mainly engaged in new energy vehicle core components and power system research and development, production and sales, products include vehicle control system, drive motor system, automatic transmission system, It is suitable for all kinds of new energy vehicles driven by different power. The state-owned platform company designated by the management committee will invest 400 million yuan in the industrial fund to the company in batches and fully support the project construction by installment payment according to the implementation progress of the project.

[French Renault's car sales fell by 34.9% in the first half of the year, the worst performance since 2009.] French automaker Renault Group announced on the 20th local time that its car sales fell 34.9% in the first half compared with the same period last year due to the new crown pneumonia epidemic, the worst performance since 2009.

[real Estate] the General Office of the State Council: issue the guiding opinions on comprehensively promoting the Transformation of Old Urban Residential areas. In 2020, new construction was started to renovate 39000 old urban residential areas, involving nearly 7 million residents; by 2022, the institutional framework, policy system and working mechanism for the transformation of old urban residential areas will be basically formed; by the end of the 14th five-year Plan period, in the light of the actual conditions of various localities, we will strive to basically complete the task of transforming old urban residential areas that need to be renovated by the end of 2000.

Sheng Songcheng, Counsellor of the Shanghai Municipal people's Government: at present, the real estate market is basically stable, mainly manifested as steady investment growth, strong resilience, new construction, land purchase, sales, housing prices and other indicators can quickly recover from the impact of the epidemic. The reason is that the consistency and coherence of the policy of "housing speculation" is the basis of market stability. Looking to the future, from the perspective of housing demand space and willingness of residents, the real estate market will continue to remain stable.

Fu Bingfeng, executive vice president of the China Automobile Association: the domestic auto market will enter a relatively stable development process in the second half of the year, basically the same as last year. If the market recovers well in the second half of the year, the annual decline in the car market is likely to return to less than 10%. In the second half of the year, SUV and luxury brand models will continue the strong trend of the first half of the year, and the rural market may become an important market for the future development of new energy vehicles.

Related market

[Baltic dry bulk freight index fell Monday, sea isthmus, Panama type ship freight increased] the Baltic dry bulk freight index fell 32 points, or 1.9%, to 1678 points on Monday, the lowest in nearly a month. The capesize index fell 75 points, or 2.5%, to 2950, with an average daily profit of $616 to $24469, while the Panamanian index fell 39 points, or 2.6%, to 1465, with an average daily profit of $13188. The index of super-convenient ships rose 10:00, or 1.1%, to 920.

[more than 10 coal mines in Yulin cut prices by 3mur11 yuan / ton] more than 10 coal mines in Yulin cut prices by 3mur11 yuan / ton. It is understood that the sales volume of many coal mines has declined recently, and the inventory is seriously suffocated, mainly because it continues to rain in the middle and lower reaches of the Yangtze River, and less goods are returned, and coal drivers are less willing to pull and transport. In addition, the high temperature weather is rare, the daily consumption of power plants is low, and the downstream power plants will be mainly pulled by Changxie, and the price of Changxie coal is dominant, and the amount of coal transported in the market is limited.

[interest rate] overnight shibor was 1.9565%, down 37.15 basis points. 7-day shibor was 2.1830%, down 4.40bp. Three-month shibor was 2.4040%, up 4.80bp.

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