Poker Interview | Bruce Lee: No bifocal demand support, spotted the direction of multi-empty timber of raw materials is king!

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Lead: bifocal oversupply, will go from here?

Interview Guest | Marketing Director, China Coal Market Network Bruce Lee reprint please contact the poker author Jun (ID: puoker) Authorization key point

Festival bifocal rose fell, what is the reason to promote?
Whether or not in line with market expectations?
Under the background of deep discount, subject to the environmental impact of limited production problems, leading to oversupply of bifocal, it will go from here?
Behind the ups and downs of the market, whether it is open or bottoming crash prelude?
Today, poker content teams to connect China Coal Market Network Marketing Director Bruce Lee, he said, “cut steel companies, for the charge is the biggest negative in terms of production bifocal shrinking, but the decrease was greater demand,
the final price did not support what’s good. “

1. the market is still in the production of iron and steel enterprises to go logic, the general direction that the finished product is stronger than the charge.
DETAILED corresponds to bifocal, the coke in the coke strength.

2. Spot, beginning with the pre-holiday has been transferred from the coke has been cut after two rounds.
Coking coal, high-sulfur coal also fell, low-sulfur coal is temporarily holding stability.
Does not support the demand in the fourth quarter, steel prices higher coke prices inventory levels, superimposed on the current discount rate is larger, follow-up or will continue to decline.

3. From now environmental policy has been all over the landing point of view, this year in terms of environmental protection, the implementation will go real implementation, limited production of steel mills, it will be strictly enforced.
.

4 follow-up should remain issues of concern are: First, the macro side, whether there will be a new policy direction; Second, whether there will be new limited production areas and whether there will be more supply for the late
big impact; Third, high-sulfur coal production will be affected.

5. Do not think the bottom stage has emerged, bifocal fundamentals did not support the demand, if the subsequent rebound, but also because of rising steel prices spurred the rise in raw material prices, thereby simultaneously repair
now the premium that period.

6. For the whole coal steel chain on the operation of the fourth quarter, the proposed multi-timber space charge.
All varieties of subsequent market trend to be arranged in strength, is: thermal paper, thread, coke, coke, iron ore.

PUOKE Interview Heavy guests

Lee, Chinese coal market network market
Director, beginning in 2011 has been engaged in work related to the coal industry, had previously worked for a consulting firm in the coal industry is now working in China coal market network as marketing director, is mainly engaged in data analysis and research consultancy coal industry chain.
Black chain market research focused, engaged in work related to the coal industry for eight years, a large number of spot analysis and accumulated in the futures market, often to areas of field research, specializes in varieties of coking coal coke.

full interview:

➤ Poker Finance: you can see, the disk trend after the holiday finished lower, this should be how to understand
?
Whether or not in line with market expectations?

Bruce Lee: billet During the National Day spot price rose 150 yuan, but there should be a component in a virtual up, appears on the disk after the holiday
finished lower prices, I think it is because billet prices led to market shocks.
Overall speaking, still in line with expectations, from the current trend, the price of the finished product is indeed relatively stronger than the raw material.

The current market expectations on fundamentals, or that steel prices would do such a logic production.
If that is to take steel companies cut production logic, the general direction, I think it will become useful ones should be some charge for it certainly is a factor bearish.
Correspond to the more specific in terms of coking coal coke, coking coal coke relative terms, or is stronger.
Since the beginning of coke in October, there will be some limited production of environmental problems and the limited production range, in addition to within the range of “26 + 2” regions, areas, such as some origin Linfen, Shanxi and Henan, etc., will also
affected.

➤ Poker Finance: How to spot market performance?
Whether the fundamentals of what has changed?

Bruce Lee: spot, in fact, from the beginning before the holiday has to do with tone, Coke has undergone two rounds of price adjustment, the total fell 100 yuan / ton; coking coal
, high-sulfur coal fell 30 yuan / ton, low-sulfur coal currently still is not obvious decline, mainly because of imports from the data, the number of imported low-sulfur coal is declining at the same time, the domestic low-sulfur coal
the resources are also relatively scarce.

From the entire fourth quarter on the big viewed in the direction of the charge spot, the demand is not very good support, and now, coking enterprises and downstream iron and steel enterprises inventory is rising, now posted in the same period
water rates are large, so follow the whole, most likely will continue to decline.

From the fundamental point of view, the price is also difficult to support.
Coke aspects, or to focus on its ability to expand the scope of limited production.
If the limited production will further expand the scope and increase the number of main areas of efforts to limit production, then it does not rule out eventually because of supply reduction on the price formation support.

coking coal, imported coal supply is no problem, but the Port has a problem, and customs clearance cycle Mongolia region also still in a prolonged period.
Domestic production, in fact, there is a potentially bullish factors, namely “Nineteen big” period, whether coal mining enterprises to stop production problems.
If the shutdown, then, it might slow down the magnitude of price declines.

But overall, the production of iron and steel companies, in terms of a maximum charge for bad, this is beyond doubt.
Even bifocal contraction in output, but the decrease was greater demand, the final price did not support any favorable.

➤ Poker Finance: limited production policy can be said to have entered the ground around the north of the present situation, to limit production around the program, how enforcement?

Bruce Lee: I learned from some cases of view, Shanxi and Hebei, to the area to limit production, coking enterprises limited production rate
should basically at 30%.
From now landing point of view, this year’s issue of environmental protection, enforcement should be the implementation of a real go.
During the National Day, the Minister of Environmental Protection is also personally led, in these areas, Shanxi, Hebei, Shandong, Henan, carried out inspection work, this can be seen, the early implementation, should not be a problem.
Limited production in the steel mills, it should also be strictly enforced.

However, the market there is also a state of mind that steel mills are now in such a high profit driven, limited production shutdown during the day to work overtime at night funnel such drilling will not occur?
I personally think, for individual businesses, this situation can not be ruled out.
However, the implementation of last year’s 276 policy point of view, the implementation of state-owned enterprises is still relatively good.

on the market there are some messages, like the main areas like this Changzhi, Linfen, coking time the coke is currently extended to 72 hours.
Unilateral point of view, it is really good for coke, coking coal for it is bad.
However, those who still question, what floor?
You will not fall?
These are currently not very good grasp.
But if the floor can really perform, then, I think, does not rule out reducing the amount of coke late supply will be larger, and ultimately affect the actual amount of digestion downstream iron and steel enterprises.

In other words, although now look at various aspects of the inventory level is still relatively high, but in the destocking phase is completed, after an overall decline in inventory levels, and then superimposed expanded the scope of limited production, it is possible for coke
price formation support.
And, as Changzhi, Linfen these areas, in addition to the production of steel required to meet a range of companies other than the inner periphery, many of which are to Shandong, Henan, sales, so once really extend the coking time of execution to 72 hours,
indeed the impact is relatively large.

➤ Poker Finance: Do you think the follow-up, but also what issues should be concerned about?

Bruce Lee: macro level, in the fourth quarter, tight funding problems we are more agreeable, but also during the holidays, there are directional RRR events
It happens, but the stock futures market feedback, is expected to still not optimistic.
So, I think, at macro level, mainly depends on how the state-oriented.
For different industries, is not it also appears as deleveraging this year, to produce energy situation?
How to enforcement?
How to evaluate?
These may require sustained attention.
How landing problem

coal steel industry is now the subject of market speculation, or “26 + 2 air pollution control plan.”
The story will tell how?
But also how the expected fried?
Variety of view points, iron and steel enterprises to perform according to plan, the overall production limit of 50%, it will not have the new limited production area?
Coke, then, from now on, Shanxi Linfen, Jinzhong, Changzhi, these three cities are all areas outside the “26 + 2” program, if the output of the main producing areas outside the scope of the decline is relatively large, for the supply of late
will there be a greater impact?
These problems may also be a follow-up on some hot market.

In addition, the annual coking coal imports are 6-7000 tons, accounting for nearly 8-10% overall, then, if sustained reduction of imported coal, and then superimposed affect some domestic coal mine safety accidents,
safety inspection or some problem of high sulfur coal resources development, because now the country in terms of air emissions, the sulfur content of the coal, there may be some requirements, such as prior to the Hebei region requires, in the production process,
allowed to use a sulfur content of coal than 1%.
If such a request further expansion, whether the latter part of high-sulfur coal production will be affected, I think we also need to pay attention to the problem.

➤ Poker Finance: Based on the above analysis, do you think bifocal follow-up trend will be?

Bruce Lee: There are many opinions now on the market are not optimistic about the materials, I also personally agree with.
Steel industry to see the whole coal chain, iron and steel enterprises efforts to limit production by 50%, coking enterprises in efforts to limit production is only 30%, supply exceeds demand charge is based on the most basic logic of supply exceeding demand, in a subsequent charge end
, prices are normal.

However, a separate analysis to bifocal, then, for coke, I’m actually optimistic about the long-term coking plant profits.
Coke is the first private enterprises, and efforts by the main producing areas of environmental impact is relatively large, so the long term, the trend of coke might be stronger than some of coking coal, that is, mainly supply-side problems.

➤ Poker Finance: from performance and technical form of bifocal two days to see, take it that the bottom stage has occurred?

Bruce: from a fundamental point of view, the bifocal and needs no support, the charge at this stage that if the bottom stage appears, then they follow
up driving force, I think it would not be derived from the demand, but because of rising steel prices spurred the rise in raw material prices, thereby repairing the same time period now current premium.
And later in the current premium of bifocal repairs are completed, the overall general direction is still bearish recommended to operate.

➤ Poker Finance: in the disk operation, you have any advice you can share with us?

Bruce Lee: I think, as a whole coal for the steel industry chain in the operation in the fourth quarter, still have to charge an empty timber.
If the follow-up of all varieties to be market trend strength arrangement, it is: HRC, thread, coke, coke, iron ore.
In October, we can not rule out the bifocal will usher in a wave of small rebound, limited production shutdown during the meeting now and then superimposed a substantial premium disk, so a rebound case of small amplitude, should exist.

But in the futures operation, it is recommended that you do more direction, spotted the direction is more important, I personally go the same way operation.
Now on the general direction, select multiple empty timber charge, so, even though there may be a wave of small rebound in charge, I would not choose to charge to do more, and more will choose to become useful, so higher safety factor.

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