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[SMM current Review] enough is enough, as much as "rising" is good.
Jul 22,2020 19:01CST
The content below was translated by Tencent automatically for reference.


(22 July)


< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / severe death / 921Universe 20Universe 164Univer 4655.


Chen Wei team new crown vaccine phase II clinical trial results: safe, can induce immune response. The paper was published online in the British medical journal the Lancet. Wu Zunyou, chief epidemiologist of the Centers for Disease Control and Prevention: the epidemic in the newly developed areas of Beijing has all been terminated.


Urumqi epidemic Prevention headquarters: in order to effectively reduce the risk of the spread of the epidemic, Urumqi has carried out free nucleic acid testing throughout the city in accordance with the principle of "all inspections should be carried out and willing to do so." at present, the testing work is being carried out in a tense, orderly and rapid manner. Testing does not charge any fee, the general public are welcome to supervise and report. All acts of collecting fees without authorization should not only be refunded, but also be seriously dealt with in accordance with the rules and regulations.


Overseas epidemic situation: new / confirmed cumulative cases / deaths / 232.06280 / > 15.0214 million / 61105152.


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

Ha! Thousands of officials in the United States are full of ugliness! Disgusting!


Us Empire priority: break through 4 million tons of epidemic beans! New / confirmed cumulative cases / deaths / 78553 > 4.0287 million / 144958.


Serious countries and regions:

1. Brazil: > 2.1665 million / 22465 gray 8pm 1597.

2. India: > 1.1948 million / 44165Universe 2pm 8771.

3. Russia: > 789100 / 5842 Universe 12745.

4. Mexico: > 356200 / 5172 Universe 4J0400.

5. UK: > 295800 / 1025Universe 4jue 5422.

6. South Africa: > 381700 / 9300 amp 5368.

7. Peru: > 362000 / 4091 Compact 13579.

8. Chile: > 334600 / 0amp 8677.

9. Iran: > 278800 / 2625amp 14634.

10. Baccartan: > 267400 / 1013tic5677.

11. Saudi Arabia: > 255800 / 2476amp 2557.

13. Bangladesh: > 210500 / 3057amp 2709.

14. Columbia: > 204000 / 6578 Universe 6929.

15. Argentina: > 136100 / 4019amp 2490.


< 2 > Today's current playback

1. Today, steel spot market prices generally rebound, the increase is more divergent than yesterday, an increase of 0: 50 yuan / ton. The East and South China markets rose 30 yuan to 50 yuan per ton: Fuzhou Sangang rose 30 yuan to 3780 yuan per ton, Hangzhou Shagang rose 40 yuan to 3720 yuan per ton, Shanghai Shagang rose 50 yuan to 3630 yuan per ton, and Shanghai three varieties rose 40 yuan to 3580 yuan 3590 yuan per ton. Only Beijing Hegang 3700 yuan / ton does not move!

Transaction situation: it is more convergent than yesterday, and the overall situation is OK.

Market mentality: low price optimism, high position cautious master.

The billet in Tangshan area rose 30% to 3420 yuan / ton.

Raw material end:

The price of scrap is stable.

The price of coke is stable and weak: the third side of the steel plant has followed up one after another, and most coke enterprises are still silent.

The price of main coking coal has been partially reduced by 20 yuan per ton.

The overall spot price of iron ore port rose 5 yuan / ton, Shandong PB powder mine 855 yuan / ton transactions, Tangshan 860 yuan / ton transactions, trading is not as good as yesterday.

For details, see SMM Nonferrous Network: [daily Review of Iron Ore Market]

This morning, Liantie continued to be strong, the main contract I2009 continued to hit a new high of 861.5 this year; the port spot market quotation was raised by 5 yuan / ton in early trading. After the late dive, the market wait-and-see mood intensified again. Some traders are cautious about the future, and their shipments are more positive. Steel mills make enquiries today, but most of them still purchase on demand, and the overall transaction is weaker than yesterday. The turnover of PB powder in Shandong area is about 855 yuan / ton, which is slightly higher than that of yesterday. It is understood that the recent flooding in the area along the Yangtze River has hindered the landing and unloading of ships, some varieties are in short supply, and business quotations are relatively strong. SMM tracking port spot prices show that the recent mainstream PB powder block price spread has narrowed to about 25Mel 30 yuan / ton, the rapid rise in powder prices, as well as lump ore prices slightly lower led to the spread continues to narrow; but taking into account the high port inventories, as well as steel mills for block demand for a significant improvement in the short term, the powder block spread in the short term or maintain low. In addition, according to the feedback of some steel mills, at the present stage, the difference between internal and external mineral prices in some areas continues to narrow, and the domestic mineral price ratio has increased significantly, leading to a steady increase in the demand for domestic mines by steel mills in the near future. [SMM Steel]


2. Futures:

RB2010 main contract: clearance will be (3768, 3800), intraday to 3800.

It rebounded strongly between 3765 and 3816 during the day, closing at 3782.


HC2010 main contract: set a new high of 3831

Don't be afraid of floating clouds to cover your eyes, only because you are at the highest level.

It rebounded strongly between 3787 and 3831 during the day, closing at 3802.


Iron ore i2009 main contract:

This goes to Taiquan recruitment Department, with a banner of 100,000 to cut Yan Luo.

It continued to soar between 836.5 and 861.5 during the day, ending at 841.5.


Coke J2009 main contract: win the championship and become a beauty with anger.

During the day, it reached a high between 1991 and 1949, and closed at 1955.5 at the end of the day.


Coking coal JM2009 main contract:

The day fluctuated weakly between 1235 and 1217, closing at 1222.5.


< 3 > tomorrow's current forecast

1. Spot aspect

Overall stable operation: regional differentiation, weak and stable markets such as Hangzhou and Shanghai, strong in Guangzhou and other places.


2. Futures:

RB2010 main contract: concussion between 3750 and 3830

HC2010 main contract: concussion between 3760 and 3850

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 suggestion: continue to remove inventory in an appropriate amount whenever there is a sharp rebound (this is especially the case in the Hangzhou market, followed by the Shanghai market, followed by the Hangzhou market, and the Guangzhou market is unscathed), and increase inventory by an appropriate amount whenever there is a large decline (especially in the low-price area).


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, after taking a lot of space and taking all, wait for the opportunity to intervene again. It is appropriate to wait and see for the time being.

Coking coal: wait and see, chicken rib market. For every high and short air within the range of activists, it is appropriate to move in and out quickly.

RB2010 main contract: support level 3750, pressure level 3830.

HC2010 main contract: support level 3760, pressure level 3850.

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

I2101 contract: support level 750, pressure level 780.

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

JM2005 main contract: support level 1210, pressure level 1250.


< 4 > Information and heart words.

1. President Xi Jinping: he presided over a forum of entrepreneurs and delivered an important speech in Beijing. The main body of the market is the power carrier of the economy, and to protect the main body of the market is to protect the social productive forces. It is necessary to do everything possible to protect the main body of the market, stimulate the vitality of the main body of the market, carry forward the spirit of entrepreneurship, promote enterprises to play a greater role and achieve greater development, and accumulate basic strength for economic development. We will properly implement the policy of rescuing and benefiting enterprises. It is necessary to implement a more proactive fiscal policy and a more prudent and flexible monetary policy, enhance the pertinence and timeliness of macro policies, create a market-oriented, legalized and international business environment, build pro-Qing political and business relations, and attach great importance to supporting the development of individual industrial and commercial households.


Vale releases production and marketing report for the second quarter of 2020.

(Vale) of Brazil's Vale, the world's largest iron ore producer, released its production and sales report for the second quarter of 2020, saying that all businesses were faced with some of the impact of the new crown pneumonia epidemic and that the second quarter was "full of challenges." Vale said that the guided production of iron ore powder remained unchanged at 3.1-330 million tons in 2020, and envisioned that the lower limit of the range was most likely to be reached. In 2020, the guided output of pellets was revised from 3500-40 million tons to 3000-35 million tons.


3. Baltic dry bulk Index: down 5.01% to 1594 points.


4. Real estate is not an ordinary commodity and has the characteristics of semi-monopoly. Once it is continuously purchased by some investors with super purchasing power, it will form a vested interest group, which is not conducive to the general public. The stabilization system has long been in place, which is to interfere in the economy by means of government input to prevent material scarcity. In the housing market, the government should support developers rather than restrict them and improve the supply capacity of houses.


5. [tensions between China and the United States escalated, and the United States asked the Chinese side to close the Consulate General in Houston] A few days ago, tensions between China and the United States escalated again. On the grounds of "reciprocal withdrawal," the US side asked the Chinese side to close the Consulate General in Houston. In this regard, Foreign Ministry spokesman Wang Wenbin said: on 21 July, the US side suddenly asked the Chinese side to close its Consulate General in Houston. This was a political provocation unilaterally initiated by the US side against the Chinese side, seriously violating international law and basic norms governing international relations, seriously violating the relevant provisions of the Sino-US consular treaty, and deliberately sabotaging Sino-US relations. The Chinese side strongly condemns it. The Chinese side urges the United States to immediately reverse the relevant erroneous decision. Otherwise, China will certainly make a proper and necessary response.


6, future steel RB2010 main contract, HC2010 main contract I forward-looking deduction perfect realization! There is still a small gap between iron ore 870 and coke 1991. In a word, the proponent of practicing the author's suggestion is full! Congratulations on making a fortune! In July, the spot rebound target position was 200 ±50, and most areas landed ahead of schedule. Among them, the Hangzhou market rebounded only 130 to 140 yuan / ton due to the suppression of high inventories. Today, a news of the US Empire's request to close the Consulate General in Houston triggered a dive in the market, but what happened in the later stage? The author has made a forward-looking analysis of Sino-US relations, and today this message is all within the author's range. The intensity of the containment of Emperor and the United States against great China in the later period is positively related to the US imperialism, the deterioration and escalation of domestic contradictions, and the emergency of Trump's election. The negative impact of Sino-US trade has lasted for quite a long time, and the dead pig is not afraid of boiling water! The overall impact on steel demand is very limited under the current circumstances (of course, if China and the United States go to war directly, it is a different matter)! Next, the law of steel price operation mainly returns to the fundamental game! Don't be too sentimental for bears! In July, there is not much time left, regional differentiation will continue, such as Hangzhou market due to high inventory, rebound extent and time is not sustainable is a high probability event! The Shanghai market is dragged down by it, every sharp rebound should be bold to reduce inventory operation, of course, the falling space is also sealed! The same is true in areas that continue to be disturbed by rain, such as Anwei Market. Guangzhou market is safe and sound, the rebound continues! Therefore, front-line bosses should adopt different modes of operation according to different conditions in different regions.

In terms of coke, even if the third round of lifting and lowering is fully landed, the author expects that the probability of the fourth raising and lowering is low, and there are four main factors. First, the profits of coke enterprises are not high, about 200 yuan per ton, and second, capacity withdrawal is expected to be on the way. No, no. Third, the demand for coke in steel mills is expanding and ready to go. Fourth, the inventory of coke enterprises is intact. As for the market analysis, the production of coke enterprises is positive and high, which is a lot of nonsense! The price is determined by supply and demand.

Iron ore point of view still remains the same, do not repeat! One thing to remind me is that the author also hopes that iron ore can plummet, but the problem is that the relationship between supply and demand is not allowed, and there is a high probability that the relationship between supply and demand will continue to tighten in the later period. Guan Xuan's so-called iron ore price deviates from the fundamentals ridiculously! The market's so-called high valuation is a weak reason for shorting! The essence of price is determined by the relationship between supply and demand. Bears have been empty since about 600 and still do not understand: sad for their misfortune, angry!

One point is that the current delivery month is not long, the main contract discount is still higher than 90 yuan / ton, at this moment should be seen as deep sticking water, more with the empty mature win and defeat, which one has a big chance of winning?!

7. pay attention to the sunrise of the inventory data tomorrow afternoon. It is expected that the output will continue to decline, the social treasury will continue to increase, and the factory warehouse will continue to decline.


With Tuesday's heart words

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 return period of basic verification demand has already reached a certain date. 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.


For queries, please contact Frank LIU at liuxiaolei@smm.cn

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