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[SMM current Daily Review] the bird looks at it three times and then flies, and the price thinks twice before it moves.
Jul 23,2020 18:27CST
The content below was translated by Tencent automatically for reference.

The bird looks at it three times and then flies, and the price thinks twice before it moves.

(23 July)


< 1 > in terms of epidemic situation.

Domestic epidemic situation: confirmed / imported cases / asymptomatic / critical count death / 1023Universe 2023Universe 176Univer 4655.


Overseas epidemic situation: new / confirmed cumulative cases / deaths / 250.2921 / > 15.2973 million / 62pj6185.


House Speaker Pelosi called the new crown virus the "Trump virus." The United States Centers for Disease Control and Prevention said the actual number of new crown infections in the United States may be 6 to 24 times the official figure, far exceeding the published data. 19000 people in the US military have been infected to form a "virologist." experts: after the lifting of the ban, they may become a "viral army."

Horton, editor-in-chief of the Lancet: America is puzzling now, and the president seems to have no respect for science, which is one of the biggest threats we face.


Us Empire first: Trump virus 4.1 million! New / confirmed cumulative cases / deaths / 66973 > 4.101 million / 14. 6185.


Serious countries and regions:

1. Brazil: > 2.2318 million / 45411.

2. India: > 1.2414 million / 48987 Universe 2gamma 9904.

3. Russia: > 789100 / 5862 Universe 12745.

4. Mexico: > 362200 / 6859max 4pm 1190.

5. UK: > 296300 / 560 Universe 4gamma 5501.

6. South Africa: > 394900 / 8170 Universe 5940.

7. Peru: > 366500 / 4406 Compact 17455.

8. Chile: > 336400 / 1654Comp8722.

9. Iran: > 281400 / 2586 Compact 14853.

10. Baccartan: > 269100 / 1332Mather 5709.

11. Saudi Arabia: > 258100 / 2331 Compact 2601.

13. Bangladesh: > 213200 / 2744 / 2751.

14. Columbia: > 218400 / 7033 Universe 7373.

15. Argentina: > 141900 / 5344amp 2588.


< 2 > Today's current playback

1. Today, the spot market price of steel is generally stable. Among them, Hangzhou and Shanghai in East China fell 10 yuan, Fuzhou fell 20 yuan, Guangzhou rose 10 yuan, Nanjing fell 10 yuan, most regions are stable.


Transaction: compared with yesterday's convergence point, the overall is OK.

Market mentality: stabilize the owner.

The billet in Tangshan area is stable to 3420 yuan / ton.


Raw material end:

The price of scrap is mainly stable and rising in some areas.

The price of coke is stable, individual coke enterprises start a new round of increase, and the prelude to the big game of steel coke begins. No, no.

The price of main coking coal has been partially raised.


The spot price of iron ore port is generally weak and stable, falling 5 yuan / ton. Among them, Shandong PB powder mine 850 yuan / ton transactions, Tangshan 853 yuan / ton transactions, trading is OK.

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

Today, with the concussion of the high level of the railway, the price in the port spot market is basically stable in early trading. Near midday, the market fell, some transaction prices in East China and North China fell slightly, and the price of Jiangnei port was relatively strong. Today, merchants are active in shipping, steel mills have made more exploratory enquiries, and the overall transaction is OK. In the afternoon, as the market rebounded, some merchants were not willing to ship goods at a low price; the turnover of PB powder in Shandong and Tangshan was 850 RMB855 / ton. It is understood that some ports in Shandong are affected by the rainstorm weather, the temporary closure of the port may affect the speed of dredging the port, and the pace of acquisition of the radiation steel plant in the port slows down. The Tangshan area since the closure of the port at the beginning of the week or tomorrow will be liberalized, and the enthusiasm of steel mills for inquiry and procurement will be enhanced. In addition, according to the calculation of SMM data model, the current profits of thread and hot coil in long-process steel mills are 225yuan / ton and 350yuan / ton respectively, according to the calculation of 110Meimei gold mine. steel mills still favor the mainstream middle grade ore under the recent profit recovery, which provides strong support for the price of imported ore.


2. Futures:

RB2010 main contract:

In a bloody fight, 3800 heads were chopped off.

It continued to rebound between 3770 and 3808 during the day, closing at 3806.


HC2010 main contract: don't be afraid of floating clouds to cover your eyes

It continued to rebound between 3787 and 3844 during the day, closing at 3840.


Iron ore i2009 main contract: trading between 835 and 855 within the day, closing at 845.5.


Coke J2009 main contract:

When autumn comes to September 8, I will spend a lot of money.

During the day, he was furious between 1955 and 2020, with a final income of 2014.


Coking coal JM2009 main contract:

The day fluctuated strongly between 1221.5 and 1238, closing at 1229.


< 3 > tomorrow's current forecast

1. Spot aspect

Maintain strong operation.


2. Futures:

RB2010 main contract: concussion between 3760 and 3830

HC2010 main contract: concussion between 3780 and 3850

I2009 main contract: concussion between 830 and 870.

J2009 main contract: concussion between 2000 and 2050

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: wait and see. More operation in the range of radicals, falling below 2000 stop loss, fast in and out.

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 3760, pressure level 3830.

HC2010 main contract: support level 3780, pressure level 3850.

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

I2101 contract: support level 750, pressure level 780.

J2009 main contract: support 2000, pressure 2040.

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


< 4 > Information and heart words.

1. Executive meeting of the State Council: speed up the transformation of old residential areas, increase the construction of weak links such as environmental protection facilities, community public services, intelligent transformation, and public parking lots; increase the construction of urbanization with the county seat as the carrier, improve county traffic, garbage and sewage treatment and other public facilities, build housing that meets the rigid needs of farmers entering the city, and improve the carrying capacity of the county seat.


2. The Ministry of Foreign Affairs: on July 21, the US side suddenly asked the Chinese side to close the Consulate General in Houston. This is 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, which is very unreasonable. 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.


3. Emergency Management Department: since the beginning of the main flood season on June 1, 45.523 million people have been affected by floods in Jiangxi, Anhui, Hubei and other 27 provinces (autonomous regions and cities). It has caused 35000 houses to collapse, resulting in a direct economic loss of 116.05 billion yuan. Compared with the average of the same period in the past five years, the number of people who died and disappeared as a result of the disaster decreased by 56.5%, the number of collapsed houses decreased by 72.4%, and direct economic losses decreased by 5%.


4. Baltic dry bulk Index: down 7.59% to 1473 points.


5. Sunrise interpretation of inventory data

After peaking for three weeks in a row, the output of the five major varieties rose again by 75300 tons to 10.8771 million tons for the first time. Among them, rebar output decreased slightly for the third consecutive week by 1300 tons to 3.8283 million tons, while hot rolling continued to increase by 45500 tons to 3.3012 million tons.

The total inventory of the five major varieties continued for the fifth week, an increase of 374600 tons to 22.0092 million tons. Among them, the rebar warehouse for the sixth consecutive week, the total inventory increased by 251900 tons to 11.9732 million tons, hot rolling increased by 86100 tons to 3.8548 million tons.

The warehouse of the five major variety factories increased by 241700 tons to 6.5195 million tons. Among them, the rebar factory warehouse increased by 120100 tons to 3.4262 million tons, and the hot rolling mill warehouse increased by 54300 tons to 1.1322 million tons.

The social bank of the five major varieties increased by 132900 tons to 15.4897 million tons. Among them, the rebar warehouse increased by 131800 tons to 8.547 million tons, and the hot rolling warehouse increased by 31800 tons to 2.7226 million tons.

See Table 1 for details.


The total output of the five major varieties expanded again. Among them, the output of rebar is still high above 3.8 million tons, because the gross profit per ton of steel is lower than that of hot rolling and other varieties, blast furnace hot metal further flows to hot coil varieties, and the peak output of rebar has passed.


The apparent demand of the five major varieties is more convergent than that of last week, which is mainly affected by rebar, and the demand for building materials is greatly affected by flood conditions. The flood season is coming to an end, so there is no need for red rain to wash your cheeks.


Inventory pressure has increased, the original crime is caused by the flood situation and the huge loss of arbitrage.

The price of stone coke is expected to strengthen again, the cost support is expected to strengthen, and the driving force of lifting and lowering of steel mills is suddenly lost.


Overall interpretation: five varieties of neutral, rebar deviation.


6. This period is now sunrise in the east and rain in the west, what is the arbitrage situation in the future, especially in Hangzhou market. Strong expectations are further strengthened, and the main logic is as follows: first, the end of the flood season and the return of demand; second, the market revaluation of commodity prices caused by the flooding of global money; third, increased demand for post-disaster reconstruction; fourth, the "executive meeting of the State Council" conveys the expected demand for urbanization. Fifth, futures proverbs, short sellers do not die. In short, the ideal is very plump (futures), the reality is very skinny (spot)! Spot for a sharp rebound to continue the appropriate amount of inventory recommendations remain unchanged, the spot does not have the necessary and sufficient conditions for a sustained rebound!


The view of Shi Jiao remains unchanged, especially the iron ore can not find the downward driving force of the trend at present! Skywatchers go and cherish, high valuation is not a necessary and sufficient condition for shorting!



With Wednesday's heart words

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 current main contract discount is still higher than 90 yuan / ton, at this moment should be seen as deep sticking water, which wins or loses more or less, 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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