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Lead: follow the thread and steel stocks in terms of iron ore will be how to adjust
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
advance limit birth to overlay nineteen large conference background, can pull up the thread of strong support?
In the fourth quarter shipment volume coupled with a drop in demand, whether iron ore this powerless?
Whether limit postpartum different regions will be misallocation of resources?
Turn what kind of chain reaction?
To do more to become useful short if raw material really is secure?
Today, poker content teams with large research director Wu Heng Iron and Steel Group voted connections, discussed in detail the secrets of the subsequent market trend Lo mine.
1. Now the market trend, in fact, is the reaction to the fundamentals, from industry terms, the thread is the most important factor limiting the production of core support, our disagreement lies in demand.
2. This year due to the high profits of the steel structure, has been in a low inventory levels, and steel mills cash is also very timely, the overall structure of production and marketing, is a relatively smooth process
3. The major mechanism estimates made, will affect the limited production of crude steel production of 40 million tons up to about the level of impact of the molten iron production is 3,000 tons.
Accordingly, it will affect the simple conversion of iron ore consumption will reach 50 million tons.
So now the biggest problem facing the spot iron ore, steel mills limited production follow-up, if not mine supply reduction, will be enormous pressure on the supply, price pressure will be more obvious.
4 follow-up of concern are: First, the release of the electric furnace production; two changes, inventory levels of thread; three different parts of the timber limit postpartum possible price difference between the larger, which may
bring some chain reaction.
5. Think this wave is only a short-term rebound in the subsequent thread will still remain volatile pattern.
The logic of iron ore is the most clear, the downward trend is difficult to have to change.
6. In operation of the disk that for iron ore contracts in recent months, and if the rebound to a better location, you can do short configuration.
In addition to the finished product on the market more and more operational recommendations empty raw materials, that there is a certain risk, because the trend is not thread form, it may be required to bear greater volatility on the market.
PUOKE Interview Heavy guests
Wu Heng, Group administered large steel
Research Director, 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: Recently you can see the black line market fluctuations, and how this should be understood?
Wu Heng: this fact, or should Variety of view, the thread is indeed rose fell rhythm, but iron ore prices did not fluctuate
intense performance, it is quite obvious trend down is quite smooth, two days by pulling the thread, there came a wave of backlash.
Now the market trend, in fact, is the reaction to the fundamentals, from industry terms, the main thread of the core support factor is the limited production, we demand that the differences that demand what is up or down
The current premium rates are great, in my opinion, there is also the impact of macroeconomic factors, the future may be more inclined to be pessimistic.
At this stage, of the current group is too large, macro performance is not too bad, can not verify the expected further weakening of demand, then there will be some repair disk premium action.
That is, in fact, can be understood as the stock market at this stage, the process is also a premium of repair.
When the macro expected poor performance of the follow-up demand, market-minded pessimistic time, that “even if it limited production, but the decline in demand was more”, then probably there will be a larger premium presentation.
However, once the market some repair to this expectation, then the follow-up spot but not very timely, futures performance will most likely bring the expected premium repair repair.
Of course, these reasons can not constitute a market trend, the market is still intense game, that thread is still in a stage can be up or down, the direction is not clear.
➤ Poker Finance: now how the mentality of steel mills it?
Wu Heng: I think the mentality is still possible.
This year due to the high profits of the steel structure, has been in a low inventory levels, and steel mills cash is also very timely, the overall structure of production and marketing, is a relatively smooth process.
But now after the change is to limit production, inventory of raw steel will have some impact, that is, Steel stock levels of raw materials will be adjusted, will no longer be maintained
before high inventory structure, the impact on iron ore is relatively large.
currently has iron ore can be said to reflect a portion of the limited production expectations from the previous 70 US dollars fell to less than 60 dollars this stage index, has fallen by more than a dozen dollars.
➤ Poker Finance: The idea that the follow-up iron ore or fell below the previous low, this, how do you see?
Wu Heng: I think this is entirely possible.
The biggest problem now facing the iron ore spot is that if there is no reduction of mine supply, the supply pressure on the follow-up will be enormous.
We know that the major mining companies are listed, subject to the constraints of the annual plan, no accident, then, will do our best to complete their annual plan, therefore, in the fourth quarter there will be a high level of shipping, ports
structural high-grade ore inventory problem will be eased.
In this context, the market has already accepted the “strictly limited production” of reality and there is limited evidence of expansion of the production area, the major institutions also do a lot of predictions, I
personally think that a more correct figure is, will affect the limited production of crude steel production amounted to about 4000 million tonnes, yield of molten iron at 3,000 tons.
Accordingly, it will affect the simple conversion of iron ore consumption will reach 50 million tons.
As a result, I think, if the subsequent major mine shipments rhythm does not change, then the pressure will be enormous iron ore spot facing.
➤ Poker Finance: How do you think the thread and follow-up steel stocks in terms of iron ore will be adjusted?
Wu Heng: from the finished product inventory point of view, as long as there is profit mills, then, the steel would not choose very price reluctant sellers, preferred,
It is timely to take profits.
From the point of view of iron ore inventory, steel mills need to maintain a normal level of production on it.
Meanwhile, this year mills are also considering additional problem, that is, after the limited production, the problem is likely due to the weather, it may further limit production on marginal existence.
As a result, steel mills will tend to take to maintain normal inventory, less bulk purchase of the policy.
last year to winter, I often say that there will be a steel Dongchu behavior, iron ore inventory levels might be increased to about 27-30 days, but this year
compared with previous years, steel mills iron ore inventory will remain at a low level.
in my opinion, is a huge inventory of port placed there, In fact the port inventory can also be viewed as steel stocks, although not right on the goods, but all available resources.
That mill use, you can buy today, tomorrow, today will be shipped this way.
Data port stocks are well known, at this time only to see steel stocks, significance.
Under such circumstances, only steel plant to maintain normal inventory levels, that does not affect its production can be.
heating season and limited production time horizon is very long, and now ahead of time, from the beginning on November 1 stayed until the next year’s March.
In the case of heating season normal, North China is the end of March 15, the Northeast region may be extended to April 15, a total of nearly four months, in which the four-month period which spot will
What happened, we did not anticipate.
But now, the best case iron ore, steel spot that sustain a high price, steel mills sustain a good profit, taking into account its own supply and demand issues, down
It can be relatively smaller.
But if really to the heating season, while demand is affected, the steel’s performance is not ideal, so when that iron ore is likely there will be a relatively sharp decline.
➤ Poker Finance: Currently Tangshan Iron and Steel limited production areas in advance, reaction to the disk can also see the rise recently become useful, in your opinion, could rally
Can steel prices shot up again?
Wu Heng: Tangshan Steel limited production area is indeed some super expectations, before that, we believe that number will begin November 15, but
now in fact, the sintering limit production for nearly a month in advance, limiting the production of blast furnace is referred to the November 1st.
At this time, the entire threaded end of the spot did not show a lot of pressure, so the I think this wave is only a short-term rebound only, thread follow-up will be a pattern of shocks.
Further, from the point of view of the transaction, stage in operation, are substantially immediately after Zengcang lighten, did not occur
Zengcang continuous behavior, which can be seen, the market trend is not clear.
and from a seasonal point of view, then, in the fourth quarter in terms of building materials, is a low season, while prices remain at such a high level, or
there are some problems.
So, as I tend to think that the disease is not there a thread continued to rise.
➤ Poker Finance: Do you think the follow-up in terms of screw ore, which is the issue we need to focus on?
Wu Heng: From a fundamental point of view, then, thread is indeed to look at the problem of the electric furnace.
for the furnace, is not strictly prohibited across the board, it is on is only a matter of time periods.
Now this time period, but also to the point, the amount of electric furnace will certainly have a part of it, and how much the amount, but also more important.
which is threaded inside a long uncertainty, note .
Another point is, recently in fact be looked at, Thread overall inventory is a substantial increase in process, and in the season, in fact, a substantial increase in inventories
increase in inventories of course there is a certain relationship with the holiday, but now the holidays had finished, or if the subsequent inventory not go down, it would need to pay attention.
And now from the perspective of steel, in fact, there are a number of shipments to feel pressure.
For the follow-up of steel is concerned, I think, still a point to note is that for the limited production areas with non-limited production areas, must be taken separately.
at the current level in terms of logistics, distribution veteran was not as rapid market acceptance has not reached that level, so the finished product is not yet able to do a nationwide circulation, that is to say,
Shandong to become useful, and can not think of where to sell where to sell, with the situation of Tangshan is different.
For the limited production areas, the decline in demand, but because of limited production, supply is contracting.
But in the non-limited production areas there will be a big problem, namely a high level of profits in steel background, with output increased by about 20% than in previous years, so the question becomes, this winter, in the non-limited production areas
inside the market, demand could increase by 20%?
I think that this is very difficult.
As a result, it may appear such a situation, pressure on resources, namely non-restricted areas within that time, the price might be relatively large.
Like these areas, Hangzhou, Guangzhou, itself belongs to the inflow of regional resources, Tangshan and other places north of some steel sales areas, due to the limited production of the north, when the volume may be reduced to a few
, the pressure will be relatively smaller.
But if it is self-sufficient local market, but also is a non-limited production area, the increase of 20% in the case of production, their needs also increased by 20% it is not realistic.
In other words, the price difference may appear in different parts of the finished product will be relatively large, therefore, it is likely to bring some of the chain reaction.
iron ore, then its logic is the clearest, need to focus on, is the question of its fall rhythm.
➤ Poker Finance : Based on the above analysis, you follow the trend of screw ore will be how to think?
Wu Heng: Lo trend mine, then I think the thread may follow a more or shock the stock market, it is difficult to be deep down, it is difficult to rally
, it is the pattern of ups and downs dilemma.
iron ore, then, because futures have reflected the early part of the first limited production expectations, spot follow-up should be a gradual decline in the process, and may have been dropped mills are willing to re-establish a stock, on time
the duration will be longer, but the magnitude of the fall, is still more difficult to predict, because in front also has been done explained.
Therefore, the pressure of the follow-up spot iron ore may be relatively large.
from a seasonal point of view, in the fourth quarter, a subsequent thermal volume trend should be the strongest, since the influence of the primary tape to limit production area is larger, then
thread, then secondly, iron ore is the weakest.
➤ Poker Finance : Finally, on the operation of the disk you have any advice you can share with us?
Wu Heng: in the operation of the disk, I think for iron ore contracts in recent months, and if the rebound to a better location, you can empty it.
Also on the market are in fact, many view the proposed multi-empty timber of raw materials, I think it is still a certain risk, because there there is a hypothesis that the finished product
the demand will not collapse.
However, If the finished product demand is less than expected once the performance is not good, taught Budie will be even more severe than Budie raw materials.
That is, in the end can not determine timber demand will be able to maintain?
Steel profits were so high, but also how much upside?
We say do more to become useful short of raw materials this trend that will screw compression than mine, my personal conclusion no way, but I think this position configuration, do in fact have little value unless
can really become useful to determine the follow-up demand is very good.
Now on the transaction, the transaction is expected, but at this stage is expected to change quickly, and there is no trend, so do more to become useful short of raw materials, the market may need to endure
relatively large fluctuations.