Poker Finance brand: the most trusted commodities and financial services industry think tank.
Cross-border, depth, professional – brings together the industry’s most worth sharing, the most knowledgeable information concentration.
Welcome to the venue and micro-channel public platform: puoketrader, Website: poker large investors and financial industry think tank platform
Lead: iron ore inventory pressure rise not fall, why not?
Interview Guest | large-scale investment and research director of Iron and Steel Group Wu Heng reprint please contact the poker author Jun (ID: puoker) Authorization
If the supply of this “magic” does not relax, the government does not come forward to say that the supply-side reforms have been completed, the furnace can let go of production, the government not to release these signals, the overall rise in the market is difficult to have an end, unless the needs of large emerging
Well, it has been a strong rise in half a year of rebar, where the top?
Iron ore inventory pressure up instead of down, why not?
What follow-up should be concerned about is black?
It could increase pressure over the raw end of the thread?
Today’s poker content teams invited Mr. Wu Heng large-scale investment and research director of Iron and Steel Group to share some ideas with you.
1. Think the price rose to the current thread, basically close to the top, until the “Golden September and Silver October,” when the price can support
or when you want to see whether there is supply-side gap, if there is no gap, that prices will fall.
2. Paul put position limits, China Steel Association meeting is a signal of such release, is worried about the rapid rise in prices, the disk may have an impact on prices in the short term, but nothing is on the spot market
the impact of supply and demand because it can not make changes.
3. The core focus of follow-up on supply, supply of this “magic” does not relax, the government does not come forward to say that the supply-side reforms have been completed, the furnace can let go of production, the government not to release these signals, then
rise in the overall market is difficult to have an end, unless the slump in demand.
4. Consider the probability of large increases of raw materials end of the latter is greater than steel, has been the reaction of coke, iron ore is also more optimistic about the upside to 700 is possible.
5. Overall, we follow the trend of steel stronger shocks, compensatory growth material, as occurs in the final high point when, need further to observe.
PUOKE Interview Heavy guests
Wu Heng, director of research investment and large-scale Iron and steel Group, Master of Economics, metallurgical engineering undergraduate.
Involved in iron delivery, thread, coke.
He has a wealth of experience in practical operation in steel mills, trading line.
➤ Poker Finance: The idea that the second half of rebar supply is able to meet the market demand for
this, how do you see?
guests Wu Heng: For this problem, I think so, if the “Golden September and Silver October,” the inventory accumulation is not it, that the market is notched,
If you can up tired, and that is no gap.
From the statistical data, production outside the table until now there is no official statement, the table is now in production at a high level.
From late July to early August, inventory levels increased it should be, because this time is in the off-season.
Also earlier on the market, through export reflow resources, increase the proportion of scrap steel and electric furnace production capacity release and other methods to increase the supply of rebar, it is theoretically feasible, but the problem is that
, and we have not seen any major effect.
EAF also has started production of the part, but the amount was less than expected.
needs to be done in the second half for a consideration.
The second half performance I think overall demand is relatively stable, of course, is certainly smaller than the first half, the “Golden September and Silver October” with “gold and three silver four” or immeasurably, and this is the law over the years.
So, now after I still have not a way to determine whether adequate supply of rebar this problem.
From the perspective of possible research, it was necessary to have a conclusion, however, from the perspective of trade point of view, it is not easy to conclusions.
But the price rose to the current thread, I think basically close to the top, until the “Golden September and Silver October,” when the price can support, the supply-side still have to see whether there are gaps, if there is no gap,
that price will fall.
Because at this stage, mills profit of 1200-1300, there is no gap, then, that time will pile up inventory.
Of course, now there is also the social inventory accumulation part, however, is that the accumulation is not enough, then superimposed on the season everyone expected, so the support price is still very strong.
If you can falsified season, the price will fall down.
But if the season can not be falsified, shrinking demand can not be falsified, the incremental supply supply can not falsifiable, that price might screw up another point of space.
But you need to know is that from these areas in Shandong, Beijing, Shanxi point of view, the recent turnover of the spot is not ideal, after the thread came to the high overall turnover are relatively weak, so the spot price
in 3900 this level has been fluctuating, from this point of view, in fact, the “Golden September and silver October,” is expected to have a bit overdrawn.
➤ Poker Finance: Recently there are also a lot of things happen, such as Steel Association conference, such as Paul mentioned continuous exchange position limits, seems to suppress disk prices, the move to the final spot market
how it affects?
guests Wu Heng: all policies, can be divided into two aspects, one is the actual impact on the market, such as limited production shutdown caused by environmental protection,
resulting in supply and demand change; then a meeting is like CISA, including those mentioned holding position limit, a release of one more signal.
First, the purpose of this signal is certainly not weigh on prices, which is one hundred percent, it is suppressed, it is excessive price increases.
the recent commodity markets all varieties, price increases very quickly that regulators take into account the impact of the year 2015 stock market crash caused by, so they need to give more consideration to the issue of risk factors, I hope, is the market
uplink can be more stable.
Therefore, the release of such signals, is worried about the rapid rise in prices, the disk may have an impact on prices in the short term, but on the spot market are no impacts.
➤ Poker Finance: How to affect the mentality of traders?
Steel mills and how to deal with it?
guests Wu Heng: on the final traders thought is actually not much impact, for traders, as long as the final price back up again, they have nothing too
big concerns, fell only a few days?
This is not the thing has come back up.
As mentioned psychological fear of heights, they have always been, and will not affect policy or other factors suddenly appeared.
Steel mills are always sales of stock as mills current order situation is nothing problem, at least in September orders have been filled, and now their job is to supply full production downstream.
➤ Poker Finance: What do you think regulators whether there will be any follow-up action to curb the excessive rise in the price of it?
What other issues will affect the price of it?
guests Wu Heng: regulators regard the short term can not see what action, and have been put security position limit, and also what measures?
Did you go directly to the guide price?
This is certainly not possible.
Follow-up really need to focus on, will depend on supply problems can be resolved, not resolved the problem of supply, rising trend will not change, the price has not dropped.
If supply can not be changed, may fluctuate due to seasonal factors, we expected will be changed, but the medium-term outlook believe that supply will shrink, then far more difficult month decline.
In other words, the supply of this “magic” does not relax, the government does not come forward to say that the supply-side reforms have been completed, the furnace can let go of production, the government not to release these signals, then the rise of the market very
difficult to end, unless the slump in demand.
➤ Poker Finance: If this is to analyze the case, steel profits would not reach a higher level?
guests Wu Heng: is this, steel mills need to worry about is profit, it is necessary to note that the raw material side.
Raw end of the late gains may be greater than steel, because steel also need to consider the problem downstream, if steel prices rise too much, downstream margins is not enough, maybe it will not lead to the start of the occurrence.
I have talked about so much, in fact, are that, if the supply is expected to remain unchanged, while the decline in steel prices is difficult, it does not mean it can rally.
In this case, the rate of increase throughout the late high probability of steel will be as good as the raw material side.
Currently Coke has been the reaction of iron ore I personally also relatively more optimistic upside to 700 is possible.
Rising power lies in the steel mills iron ore profits, will make such high profits tend to purchase high-grade steel resources, which in turn involves the issue of structural iron ore stocks, in fact, high-grade iron ore resources relative to
say not many.
In addition, prior to the trade, from steel mills to traders, the mentality we are cautious side, if the mentality is expected to change back to 2011, that level by 2012, and that very substantial ore price
Then the steel mills and traders, their expectations changed?
Now we see that all of mine are imported profit, which is very powerful.
The original imported ore has been upside down loss-making phenomenon, this point before me on the poker forums have talked about, then I said, if the mine is not none, then there is no way to pick up market, because this is the exploitation of middlemen.
And now mine react quickly, it is none other, the result is out of the reaction, the spot dollar goods cheaper than some, this will arouse the interest of traders, that the rise in prices is not a matter of time yet?
So, now after the fact that profits have imported ore imports, should pay attention.
Of course, do not need to worry too much high-grade steel to increase demand, making the spread between the increase in low-grade problem, because between the two are not substitutes.
May not give a good example, the spread between LV bag with the ordinary pack more and more that this is not normal for you?
Because the income, the middle class has also increased the demand for high-end package is also naturally increases.
Now steel mills to make money too, and will not cost too much to consider the issue, not many mills will go to choose cost-effective and give up the high-grade ore resources.
➤ Poker Finance: Finally, please summarize for us to follow the trend of steel bars.
guests Wu Heng: I think, follow the trend of steel prices is stronger shocks, raw materials compensatory growth.
As for the ultimate high point occurs when, still need to go further observation.