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[SMM current Review] there is plum in the south of the Yangtze River, there is nothing to be afraid of the steel price.
Jul 21,2020 18:44CST
The content below was translated by Tencent automatically for reference.


(21 July)


< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / critical count death / 892Universe 2015Universe 149Univer 4655.


There have been no new confirmed local cases in Beijing for 14 consecutive days, and all streets and townships are at low risk. Beijing: a total of 335 confirmed cases have been reported in this round of the epidemic, and nearly 70% of the patients have been cured and discharged from hospital. People entering Beijing continue to carry out closed-loop transportation and 14 days of intensive observation. Beijing will restart the consumption season.


Overseas epidemic situation: new / confirmed cumulative cases / deaths / 17pr 8575 / > 14.7743 million / 60pr 8711.

Trump: the whole world is jealous of the scale of the new crown test in the United States.

Us Empire priority: new / confirmed cumulative cases / deaths / 46658 > 3.9615 million / 14pr 3835.


Serious countries and regions:

1. Brazil: > 2.1216 million / 24866 gray 8penny 0251.

2. India: > 1.1561 million / 21146Universe 2recover8099.

3. Russia: > 777400 / 5940amp 12427.

4. Mexico: > 349300 / 5311 Compact 3gamma 9485.

5. UK: > 295300 / 0bat 4pm 5312.

6. South Africa: > 364300 / 13285Comp5033.

7. Peru: > 357600 / 4090 Compact 13384.

8. Chile: > 333000 / 4183 Universe 8633.

9. Iran: > 273700 / 2414 Compact 14405.

10. Baccartan: > 266000 / 15870.5639.

11. Saudi Arabia: > 253300 / 2429amp 2523.

13. Bangladesh: > 207400 / 2928 Compact 2668.

14. Columbia: > 204000 / 6578 Universe 6929.

15. Argentina: > 130700 / 4231 Universe 2373.


< 2 > Today's current playback

1. Today, the spot market price of steel has rebounded as a whole, with an increase of 0: 30 yuan / ton. Beijing, Fujian, Guangzhou, Zhengzhou and other places are stable, Shanghai Shagang rose 30 yuan / ton to 3600 yuan / ton, Hangzhou Shagang rose 30 yuan / ton to 3680 yuan / ton.

Deal: Riman West Building, beauty looks beautiful

Market mentality: cautious and optimistic living.

The billet in Tangshan area rose 10 to 3390 yuan per ton.


Raw material end:

The price of scrap is stable.

The price of coke is stable and weak: some areas of Shanxi and Hebei have dropped by 50 yuan / ton, and Shandong is stable. The third round of steel mills raised, lowered and expanded, but the coke enterprises resisted the strong mood.

The price of main coking coal remains stable.

The overall spot price of iron ore port rose 5-15 yuan / ton, and the port price difference converged sharply. Shandong PB powder mine has a transaction of 850 yuan / ton and Tangshan 852 yuan / ton, and the price is almost flat. Trading is ordinary, not as hot as the market! For details, see SMM Nonferrous Network: [daily Review of Iron Ore Market]

This year, the main contract of Liantie Railway reached a new high of the year, and the price in the port spot market was raised by 515 yuan / ton in early trading; the turnover of PB powder in Shandong area was about 845 million yuan / ton, and the price in Tangshan area was around 850 yuan / ton. Recently, the arrival of goods in Tangshan area is abundant, and since the end of last week, the two ports in Tangshan have been banned from dredging ports in different periods. Port inventory in Tangshan area has accumulated rapidly, and the price gap between Tangshan and Shandong continues to narrow.


2. Futures: night reading, gold list nomination

RB2010 main contract: within the day, it rebounded strongly between 3696 and 3765, closing at 3764.

HC2010 main contract: within the day, it rebounded strongly between 3734 and 3792, closing at 3787.

Iron ore i2009 main contract: soaring between 812 and 848 within the day, tail 841.

Coke J2009 main contract: within the day between 1930.5 to 1969 strong shock, closing 1960.5.

Coking coal JM2009 main contract: within the day in 1207 to 1247.5 between a strong rebound, closing 1233.5.


< 3 > tomorrow's current forecast

1. Spot aspect: maintain strong operation.

2. Futures:

RB2010 main contract: concussion between 3730 and 3800

HC2010 main contract: concussion between 3750 and 3830

I2009 main contract: concussion between 830 and 870.

J2009 main contract: concussion between 1930 and 1980

JM2009 main contract: concussion between 1210 and 1250


3. Spot operation advice: every sharp rebound in the right amount of inventory, a larger decline in the right amount of inventory.

4. Futures operation suggestion

Thread and hot coil: it is suitable for high throwing and low suction rolling operation in the range.

Iron ore: in the range, the bargain is still dominated by bargain, the holdings are reduced by an appropriate amount near the upper value, and the preferred option is to continue in the distant months.

Coke: the proponent of the author's suggestion, it is appropriate to wait and see after leaving the court at the top of 1950. Activists can meet the high and short air in the right amount, fast in and out.

Coking coal: wait and see, chicken rib market.

RB2010 main contract: support level 3730, pressure level 3780, 3800.

HC2010 main contract: support level 3740, pressure level 3800, 3830.

I2009 main contract: support level 830, pressure level 850, 870.

J2009 main contract: support level 1930, pressure level 1980.

JM2005 main contract: support 1200, pressure 1250.


< 4 > Information and heart words.

1. Central bank: carry out 100 billion yuan 7-day reverse repurchase operation, as 50 billion yuan reverse repurchase expires, the net investment is 50 billion yuan on the same day. 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. The central bank is "standing still", and the latest research by some institutions has concluded that it is expected to restart the "interest rate cut" in August.


2. [development and Reform Commission issued the second batch of central budget investment of 1.05 billion to support the construction of Xiongan New area] according to the National Development and Reform Commission on the 21st, the National Development and Reform Commission recently issued a special investment of 1.05 billion yuan in the second batch of central budget for the construction of Xiongan New area in 2020 to support the construction of high quality and high standards in Xiongan New area. On the premise of regular epidemic prevention and control, the National Development and Reform Commission will speed up the construction of major projects in Xiongan New area, help coordinate and solve difficulties and problems in project construction in a timely manner, and continue to increase financial and policy support for the construction of the new area.


3. Baltic dry bulk Index: fell 1.87% to 1678 points.


4. SMM tracking data show that from July 12 to July 18, a total of 108 ships arrived at eight major ports in China, and the incoming cargo volume is expected to be 16.89 million tons, an increase of 1.45 million tons over the previous period and an increase of 5.36 million tons over the same period last year. During this period, Australia's outbound shipments increased by 790000 tons to 16.72 million tons, an increase of 3.38 million tons compared with the same period last year. Centralized maintenance of Australian ports ended one after another in mid-early July, Australian iron ore shipments increased, and the proportion of Australian shipments to China continued to increase in this period. The current period of Brazilian port departure fell by 400000 tons to 5.82 million tons compared with the same period last year, mainly due to the concentration of maintenance at Brazilian ports last week, which fell slightly by 230000 tons compared with the same period last year. [SMM Steel]


5. [Shagang late July thread flat plate compensation 120] Shagang factory price thread stable, spiral stable, high line stable in late July. Now rebar 3850, high line 3910, snail 3950. Make up 120 for the thread of the previous period, but the screw will not help.


6. Plum has gradually emerged in the south, and plum has emerged in Shanghai and Hangzhou. In the near future, we need to pay close attention to the fluctuation of daily trading volume of building materials. Once the trading volume lasts for more than 3 days, the basic verification demand has been returned for a long time. Although the steel price is suppressed by inventory, but the later strengthening of cost support should be a high probability event! Even if the steel mill falls back, the space is also very limited, and it is also an opportunity for those who are slow to understand N wave to replenish inventory! Qigang is not afraid of summer rain, Xiaoxiao River Shangcheng, only due to the late demand return date can be expected.


Shijiao's point of view remains unchanged, do not repeat!

Iron ore prices need to remind short orders, despite the sharp rise today, but the discount in recent months is still as high as 83 yuan / ton. I would like to ask the shutter people, in the foreseeable short term in August, where is the driving force for the decline in iron ore spot? The author certainly hopes that it will fall, but objectively can not find its falling logic!


With Monday's heart words

The production limit of environmental protection in Tangshan area is becoming stricter, and the independent billet rolling mill is closed to bear pressure on the local billet. The downward trend of billet has a certain negative impact on market sentiment, but the cost support is gradually coming out of the south, and the space for callback is limited.

At present, the intersection of strong expectation and weak realization: after plum, the demand is expected to be falsified! Weak reality in some areas of the south will still be plagued by rain and some areas of the negative impact of high social inventory, such as East China Hangzhou social inventory hovering at 1.1 million tons, there is no sustained rebound driving force, as long as the social inventory continues, the road to rebound is tamped, otherwise the space and sustainability are in doubt. In addition, the huge loss of arbitrage in the early period still explodes continuously, which will have a negative psychological impact on the market. In short, the view that there are many battles on the road to a rebound in July remains unchanged.

In view of the large probability of the relatively quiet period of macro factors in August and the weakening of strong futures expectations, the spot futures (three types of materials) have converged, the choice of futures direction needs to be guided by spot demand, and the short-term 3700 platform has a large probability of limited volatility.

Coke basic contradiction has not been highlighted, coke rebounded to this situation, more than a single intervention is unlikely to win. The author's point of view remains unchanged and is still optimistic in the medium term, and it is suggested that it is appropriate to wait for a sharp decline and then intervene.

The view of iron ore remains unchanged and continues to be bullish on late-stage prices. At present, in the relocation of the warehouse in the near and far months, it is the best choice to choose the far month of the machine cloth. The port inventory has exceeded 110 million tons this week, but it still needs to be filtered. Routines are often used!


Attached weekly review

The author predicts that the logic will be strong next week, from the main road to simplicity:

First, supply-side output phased convergence continues to move, superimposed environmental protection production restrictions in Tangshan area become stricter again.

Second, the demand for building materials affected by the flood season is coming to an end, with plums coming out in most areas of the south; although the impact of the flood season is higher than expected, the demand is still very resilient.

Third, real estate housing construction is growing by 2.6%, and the growth rate of new construction has narrowed sharply by 7.6%, which is further supported by the demand for rush construction.

Fourth, the strengthening of cost support.

(1) the scrap resources are tight, and the price is easy to rise but difficult to fall.

(2) Iron ore prices are easy to rise but difficult to fall: the epidemic in Brazil has worsened, and Vale talks about its annual target of 3.1-330 million tons; weather factors affect Australian kangaroo shipments; strict environmental production restrictions at steel mills in Tangshan have nothing to do with iron ore demand. High domestic demand is fine.

(3) the fundamentals of coke are safe and sound, and Dou E is wronged in the second round of forced reduction of coke enterprises! The production capacity of Shanxi, Shandong, Hebei and Jiangsu can be lost, and the demand for coke in steel mills will be more expected in the later period.

Fifth, the inventory pressure of steel mills has been further alleviated, and there is no pressure to reduce prices.

Fifth, futures are strongly expected to be affected by the stock market, repair and return at that time …. No, no.

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




Price forecast
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