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It's been a scary night! European and American stock markets tumbled crude oil COMEX silver plunged 10%! What happened to the domestic black collective "fall" market?
Sep 22,2020 08:13CST
translation
Source:Futures daily
The content below was translated by Tencent automatically for reference.

SMM News: European and American stock markets suffered a sharp sell-off on Monday. Investors are worried that after the further deterioration of the epidemic in Europe, many Congress will reconsider the implementation of the blockade policy, and the pace of economic recovery may be interrupted again. The three major indexes of US stocks fell collectively, and the decline narrowed in late trading, driven by a rebound in technology stocks. By the close of the day, the Dow Jones Industrial average was down 1.8% at 27147.70; the S & P 500 was down 1.2% at 3281.06; and the NASDAQ closed down 0.1% at 10778.80.

International gold and silver prices fell sharply on Monday. As of the close of the day, COMEX gold futures December contract closed at US $1910.6 per ounce, down 2.62% X Comex silver futures contract closed at US $24.387 per ounce, down 10.11%. Market analysts believe that the strengthening of the US dollar is the main reason for the decline in gold prices on the day.

International oil prices fell sharply on Monday as a gradual resumption of crude oil exports in Libya and a rebound in outbreaks in Europe and other places weighed on the outlook for oil demand. As of the close of the day, NYMEX crude oil futures October contract closed at US $39.31 per barrel, down 4.38 per cent, while Brent crude oil futures November contract closed at US $41.44 per barrel, down 3.96 per cent.

Yesterday, black fell across the board, iron ore fell for 3 days in a row, down nearly 3%, thread, hot roll is still weak. Iron ore futures have fallen continuously since they peaked on September 3, with a maximum cumulative adjustment of more than 11%. Black continued its downward trend during the night trading session last night. Market participants believe that this round of steel futures price adjustment is due to the weakening of macro expectations, the loosening of market supply and demand, the slow start of peak season demand, and the continued weakness of high inventory removal efforts.

European and American stock markets closed down, precious metals fell sharply

European and American stock markets suffered a sharp sell-off on Monday. Investors are worried that after the further deterioration of the epidemic in Europe, many Congress will reconsider the implementation of the blockade policy, and the pace of economic recovery may be interrupted again.

The three major indexes of U. S. stocks fell collectively on Monday, and the decline narrowed in late trading, driven by a rebound in technology stocks. By the close of the day, the Dow Jones Industrial average was down 1.8% at 27147.70; the S & P 500 was down 1.2% at 3281.06; and the NASDAQ closed down 0.1% at 10778.80.

European stock markets closed lower across the board on Monday. By the close of the day, the UK's CAC 100 index was down 3.3% at 5804, while France's FTSE 40 index was down 3.74% at 4792.0. Germany's DAX index fell 4.37% to 12542.4.

The commodity market also showed a general decline.

International gold and silver prices fell sharply on Monday. As of the close of the day, COMEX gold futures December contract closed at US $1910.6 per ounce, down 2.62% X Comex silver futures contract closed at US $24.387 per ounce, down 10.11%. Market analysts believe that the strengthening of the US dollar is the main reason for the decline in gold prices on the day.

International oil prices fell sharply on Monday as a gradual resumption of crude oil exports in Libya and a rebound in outbreaks in Europe and other places weighed on the outlook for oil demand. As of the close of the day, NYMEX crude oil futures October contract closed at US $39.31 per barrel, down 4.38 per cent, while Brent crude oil futures November contract closed at US $41.44 per barrel, down 3.96 per cent.

The black line has fallen across the board.

On Monday, black fell across the board, iron ore fell for three days in a row, down nearly 3%, thread, hot roll is still weak. Steel market prices have declined significantly in the past two weeks. By the afternoon of September 21, the thread 2101 contract fell 279 yuan / ton, or 7.3%, from the beginning of September, while the hot rolled coil 2101 contract fell 316 yuan / ton, or 7.9%, in the same period. Iron ore futures have fallen continuously since they peaked on September 3, with a maximum cumulative adjustment of more than 11%. Black continued its downward trend during the night trading session last night.

Wang Zeyong, a metal analyst at South China Futures, believes that this round of steel futures prices have been greatly adjusted, it is caused by the weakening of macro expectations, the loosening of market supply and demand, the slow start of demand in peak season, and the continued weakness of high inventory elimination. According to him, the current macro expectation has gradually changed from positive to cautious. On the one hand, inflation expectations have weakened and monetary easing expectations have cooled down; On the other hand, under the policy tone of "housing speculation" and the continuous tightening of the financing policies of the central bank and the Ministry of Housing and Construction on major real estate enterprises, the monthly growth rate of land acquisition and new construction of housing enterprises slowed significantly in August, and infrastructure construction was also dragged down by funds. Under the influence of less issuance of special bonds from June to July, superimposed high temperature and flood, and so on, the growth rate of infrastructure also slowed down significantly, although special bonds were issued again in August. However, the impact on capital construction lags behind to a certain extent.

"the main factor for the sustained rise in steel prices from July to August is that there are certain expectations that demand in September will return to the high level of May this year, but until late September, the start of demand in the peak season is obviously weak, the transaction continues to be weak, and the overall demand is lower than expected. While steel production continues to be exuberant, the average daily output of crude steel reached an all-time high in August, the shipping sentiment of superimposed traders is strong, and the total market supply continues to be loose. " Wang Zeyong said.

Judging from the data, the weekly average trading volume of construction steel in the country last week was 216100 tons, down 7900 tons from the previous month; the social inventory of the five major varieties was 15.6615 million tons, down 55700 tons from the previous month. In terms of inventory, the data of the social bank fell again last week after several weeks of accumulation, but the decline was still smaller than that of the same period in previous years. Social inventories rose by an average of 60, 000 tons a week in the first three weeks of September, fell by 350000 tons in the same period in 2019, and rose by 10, 000 tons in the same period from 2015 to 2018. Shanghai mid-term futures researcher said that on the whole, factory depots and social inventories have declined slightly, superimposed weekly production has increased, corresponding to a small increase in apparent consumption, but the release of demand in peak season is still less than expected, which is also the main reason for the recent adjustment of steel prices.

Shanghai mid-term futures researchers believe that the overall demand performance in September this year is weak, and the market expectations for the peak season from July to August are higher, but the tightening of real estate financing policy in late August suppresses real estate start, and the peak season demand is lower than expected. Although the National Day holiday is coming, the market will have the phenomenon of purchasing in advance, but while the inventory as a whole is still high, the digestion pressure on "Jinjiu" is relatively great, and the intensity of the outbreak of demand has yet to be tested. Attention can be paid to the intensity of inventory removal before National Day. However, the "debt limit" of real estate enterprises will lead to the expansion and contraction of real estate enterprises for a long time, which is also in line with the requirements of internal circulation. The researcher predicts that the demand level of "gold, silver and silver ten" may be difficult to return to the level of the "gold, silver and silver" period, and if the production restriction policy is difficult to effectively suppress the supply level, steel prices will still face greater pressure in the medium term.

"short-term steel weak adjustment may continue, black goods resonance fall, cost support temporarily invalidated, price stabilization needs steel mills to reduce production to match less than expected peak season demand." Wang Zeyong added that the current decline in raw material prices is even greater, and although steel profits are on the low side, they are not enough to prompt steel mills to stop production and overhaul, so short-term price adjustments may continue to be weak.

For iron ore, Guotai Junan Futures Iron Ore Senior researcher Ma Liang said that although the drop in iron ore futures prices yesterday was largely disturbed by rumors of production restrictions in Wu'an area, judging from the recent continuous decline in iron ore, its core logic is mainly reflected in the phased valuation adjustment.

According to him, the core driving force of the previous sharp rise in iron ore lies in the rapid elimination of iron ore stocks, especially powder ore stocks, driven by sustained high domestic demand. Since June, iron ore port inventories have bottomed out. As of September 18, 45 MTR ore stocks stood at 115 million tons, an increase of nearly 9 million tons from the low of 106 million tons on June 19th. At the same time, the most contradictory powder ore inventory has also rebounded continuously from the bottom in late August, from 65.8 million tons on August 21 to 69.51 million tons on September 18.

"from a driving point of view, due to the rebound of total inventory and powder inventory in the past month, the previous price rise driven by the rapid elimination of inventory has come to an end. Recently, due to the continuous compression of timber profits, superimposed production expectations and speculation, which has triggered iron ore valuation adjustment, the recent drop in iron ore spot prices is obviously less than the market, and the 2101 contract discount continues to expand. Yesterday 2101 contract discount gold Bubba warehouse receipt price more than 190 yuan / ton, excessive discount or restrict the room for further adjustment of 2101 contract. " Ma Liang said.

From the point of view of the trend, Ma Liang believes that since the core driver of the rise in iron ore this year comes from the sustained high growth of hot metal production in China, in order to fundamentally solve the contradiction between supply and demand of iron ore, we still need to start with domestic hot metal production. The decline in hot metal production can only be achieved through two ways: first, through administrative production restrictions, although recently there have been rumors of domestic production restrictions, they have not yet officially landed. And from the perspective of domestic hot metal output this year, local production restrictions may be difficult to fundamentally solve the contradiction between supply and demand of iron ore. Second, through the way of economic production reduction, but at present, the long process steel plant is still generally profitable, and we have not seen the pressure of substantial production reduction in the blast furnace for the time being. Therefore, before the domestic hot metal output shows a trend inflection point, iron ore can hardly have the power of trend decline.

The oil and fat fell after a big rise.

On Monday, the agricultural market continued to be strong. By the close of trading yesterday afternoon, the three major fats had all risen more than 2%, with rapeseed oil leading the way, up more than 3%. Soybean oil, rapeseed oil, palm oil main contracts respectively increased positions 21000 hands, 18000 hands, 16000 hands, funds continued to flow into the oil plate.

However, last night's trading session, the three major oils collectively weakened, as of the close of the night, the main contract of palm oil closed down 2.45%.

Bi Hui, a senior researcher at Baocheng Futures, said that the recent strong upward trend in oil futures is mainly driven by the resonance of fundamentals and energy attributes. American bean futures on the outer plate, Canadian rapeseed futures and Malaysian palm oil futures are all in a trend that is easy to rise and difficult to fall, together to build a strong cost support for the three major oil futures.

From the news point of view, Xiang Bo, a senior researcher of agricultural products at the Zheshang Futures Research Center, said that the recent expansion of oil tank capacity projects in various parts of grain storage have triggered market expectations for the collection and storage of edible oil, under the guidance of the policy of "six guarantees" and "six stability." there may be more collection and storage in the future. Yihai Group temporarily shut down the Sabah palm oil refinery in Malaysia due to the novel coronavirus epidemic and other factors such as the unsmooth progress of Sino-Canadian negotiations have also affected the short-term oil market.

"in the early stage, rape oil strongly led the rise of oil varieties, although the performance in the recent stage was once weaker than soybean oil and palm oil, but the fundamental strong characteristics have not changed." Bi Hui said in an interview with Futures Daily that the continuous rise in Canadian rapeseed futures prices will push up the cost of domestic rapeseed supply. Although the import of rapeseed to Hong Kong has increased, 543000 tons of Canadian rapeseed will arrive in Hong Kong from September to November. However, the operating rate of domestic oil factories has increased significantly, making domestic rapeseed supply still tight. As the most tight supply and demand of the three major oil varieties, under the background of tight supply and demand, the rising import cost pushed up the future price of rapeseed oil strongly.

In Xiang Bo's view, in fact, the fundamentals of rapeseed oil have been gradually improved since a few years ago, the temporary storage of rapeseed oil out of storage superimposed a decline in domestic acreage, domestic supply continued to reduce, and import dependence gradually increased. Recently, the import of rapeseed in Canada has been restricted. Although the import of rapeseed has increased, the reduction in the import of rapeseed is more obvious, and the domestic supply is more tight. In the future, rapeseed oil will remain strong under the background of continuous improvement in supply and demand.

The fundamentals of soybean oil are driven by the rising cost of raw materials and the strong rise in the futures price of American soybean oil on the outer plate. According to Bi Hui, the recent strong rise in the price of US beans comes from the continued strong demand for exports of US beans and the heating up of weather speculation. With the significant acceleration of the pace of export sales of American beans to China, the futures price of beautiful beans has been continuously supported. At the same time, with the recent US Meteorological Office, Australian Meteorological Office, and Japan Meteorological Agency successively raising the probability of La Nina in this autumn and winter, market anxiety about the prospect of soybean production in South America this year continues to rise, further supporting the accumulation of weather risks in US bean futures. Short-term US soybean futures are still easy to rise and difficult to fall, and continue to support the raw material cost of soybean oil futures. At the same time, with the slowdown of US soybean crushing, the steady growth of US soybean oil consumption makes the market expect the pace of destocking of US soybean oil to further accelerate, which will continue to support the strong performance of US soybean oil futures and bring linkage support to domestic soybean oil futures prices. But in the follow-up, Xiang Bo believes that at present, Meidou is in a high valuation area, there is little room to continue to rush up, but there is no downward drive, or showing a strong oscillation trend, there may be a small risk of falling back in the future.

With regard to palm oil, he told Bo that the current production inventory is still on the low side, Malaysia's production growth is not as expected under the background of the increasing season, India's vegetable oil inventory is low, and the demand for replenishment increases exports, and it is expected that it will be difficult for the origin inventory to return to the high level of previous years after entering the production reduction season in the future, which is conducive to the rise of palm oil price center of gravity.

"the domestic palm oil futures price is mainly driven by the rising price of outer palm oil futures." Bi Hui said that specifically, on the one hand, the increase in palm oil production was lower than expected; on the other hand, data released last Sunday by ITS, a shipping survey agency, showed that Malaysia's palm oil exports from September 1 to 20 were 1.035 million tons, an increase of 9.4 percent from 946000 tons in the same period in August. Judging from the Indonesian market, another major palm oil producer, the Palm Oil Association said on Sunday that Indonesia exported 3.13 million tons of palm oil in July, up from 2.92 million tons in the same period last year and 2.77 million tons in June this year. Exports from the two major palm oil producing countries were better than expected, giving a positive boost to palm oil futures prices.

In addition, there are market rumors that Indonesia will raise tariffs on crude palm oil exports. If the policy is consistent with market expectations, Malaysian palm oil exports are expected to occupy a favorable position and continue to provide strong support for Malaysian palm oil futures. As the domestic palm oil inventory is at an all-time low, the inventory pressure on the rising price is obviously less than that of soybean oil, so the future price of palm oil is more likely to be boosted by the linkage of the international market and the increase is greater than that of soybean oil. In Bi Hui's view, the three major oil rotations, the linkage of spot prices, the rise in raw material costs and the impact of the outer disk, and other factors will further consolidate the strong operation pattern of the oil market.

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