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    The Spring Festival iron ore "fire" has been a mess, but also with the black line full up?

    2019-02-11 09:25:34

    Futures dailyZhou Xiaoya

    During the Chinese New Year holiday, iron ore became the biggest bright spot in the international commodity market. Due to the expectation of supply cuts, the price of iron ore swap contracts in Singapore rose sharply. Market participants generally believe that the domestic black department is expected to usher in a "open door" after the holiday. At the same time, the Fed’s dovish tone and good economic data have kept the dollar strong and the international gold price has remained oscillating during the Spring Festival.

    During the Spring Festival, the outer iron ore continues to rise.

    During the Chinese New Year holiday, the tailings dam breakout event in Brazil's Vale was further fermented. On February 4, Vale officially said it decided to shut down the Laranjeiras dam in the Brucutu mine. The annual iron ore production in the affected area is about 30 million tons. On February 5, Vale once again announced that it will suspend the Vargem Grande project, which produces about 13 million tons of iron ore per year, but this is part of the 40 million tons reduction plan, and Vale clearly pointed out that the company will improve other mines. The output is used to make up for this part of the production cut. Affected by the incident, the price of iron ore swap contracts in Singapore continued to rise. During the Spring Festival, the cumulative increase was around 8%. On February 8th, the intraday price rose to US$94/ton, a record high since August 2014. "From the perspective of funds, the short-term withdrawal of funds in the domestic market in the last trading day before the holiday." Kaifeng investment black researcher Wang Wei believes that although the iron ore futures after the holiday is expected to open higher on the first day, However, it does not rule out the situation of short positions after the margin is lowered.

    From the perspective of fundamentals, during the Spring Festival, Brazilian courts demanded the suspension of the Brucutu mine, the flooding in eastern Australia, and India’s declaration that the mining rights of Goa were illegal, all of which were sudden events that pushed up the price of iron ore. Wang Wei told the Futures Daily reporter that under the current price level, the profit margin of small or medium-sized mines to resume production or increase production is relatively large. It is expected that some small and medium-sized mines will start production or expansion plans, and they need to pay attention to actual production changes and production schedules. Zou Jun, chairman of Shenzhen Junrui Capital, said that from the current situation, iron ore production will exceed 40 million tons, and if the price of the outer disk continues to rise, it will drive domestic iron ore futures to rise. “In the short term, the impact of the dam break event in Brazil's tailings dam has been fully reflected in the disk, and the price may rise to over US$100/ton in the later period. In the medium term, the iron ore fundamental supply and demand are roughly balanced before the accident. After the accident, the supply will be affected. Although the iron ore price will face a correction after the big increase, the overall price will remain strong." As an important raw material for steel production, the price of iron ore has a greater impact on the cost of rebar. .

    “Firstly, from the perspective of cost, the price of rebar will be boosted. Secondly, from the perspective of supply and demand, rebar is currently in the off-season supply. After the end of February, market demand will start one after another. It is expected that it will enter the demand season in March. Finally, from the inventory situation, rebar stocks are relatively low before the Spring Festival, and the accumulated warehouse speed is lower than the same period of last year.” Zou Jun believes that there is still room for improvement after the post-holiday steel price adjustment, cost and supply and demand situation. Conducive to the strength of rebar prices, and the start of traders spring storage may also push prices up. “In the short term, iron ore may drive the overall upward movement of the black sector; in the medium term, the arbitrage opportunity of the screw mine ratio is worthy of attention.” Wang Wei believes that with the increase in iron ore prices, steel mill profits will continue to Pressure, superimposed on the impact of coke prices, can pay attention to the long trading opportunities of steel profits.

    Moderate callback of international gold prices

    On the one hand, on the one hand, affected by factors such as weak global stock market performance and Sino-US trade negotiations, investors’ risk aversion has warmed up; on the other hand, Fed’s dovish and non-agricultural data, January manufacturing PMI and other economic data exceeded expectations. The US dollar index remained strong and the international gold price was under pressure. Overall, precious metal prices have remained oscillating during the Spring Festival. The international gold price showed a moderate correction, and London gold fell by 0.10% during the domestic market. COMEX gold and silver also fell slightly. On Friday, COMEX gold futures closed up 0.3% at $1318.2 per ounce, down 0.29% on the week; COMEX silver futures closed up 0.71% at $15.83 per ounce. For the international gold price trend during the Spring Festival, rubber investment partner Jiang Shu said that before the holiday, the price of gold continued to rise. During the domestic market, a number of economic data showed that the US economy was relatively strong. Under the influence of the strength of the US dollar, the international gold price has a certain degree of correction, but the rate of correction is not large compared with the same period of the previous year. "Because the US dollar remains strong, the offshore renminbi and other relatively weak, offset some of the decline in international precious metals, it is expected that the domestic gold futures price correction will be smaller than the international market after the holiday." "In the short term, the Fed does not raise interest rates in March is a high probability The event, the process of gold's rise may not have completely ended." Jiang Shu said that before the end of the Federal Reserve's interest rate meeting in December last year, the international gold price rise has begun, the current round of the market started earlier, lasts longer, the recent Fed Expectations of no interest rate hike may also have been reflected in the market, and the price of gold may fall back after the holiday. The outer plate of non-ferrous metals rose and fell during the Spring Festival, the copper rose nearly 1%, the zinc zinc fell more than 2%, and the nickel also showed a slight decline.

    Tang Yufeng, a researcher at Jinrui Futures, believes that there has been no major change in the fundamentals of copper since this year. In February, the copper market will still be in the low season of consumption. There is basically no expected difference in the supply side, and the seasonal accumulation will be weaker than in previous years. In the second quarter, domestic and foreign copper smelting faces a large maintenance level, and low inventory will bring the following support to copper prices. "In the current weak fundamentals, the core logic of price fluctuations is that the market will repair the excessive pessimistic expectations, and the macro pricing logic will still dominate the copper price." He said that during the Spring Festival, the trend of international large-scale assets began to differentiate. The stock market in Europe, Japan and Korea has peaked, the US dollar has strengthened, and the exchange rate in emerging markets has fallen slightly. The current macro expectations have been fixed. It is expected that the rebound in copper prices will come to an end and there may be a risk of callback. It is worth mentioning that the China-US high-level economic and trade consultation will be held in Beijing from February 14th to 15th. In this regard, Xu Wenyu, director of macro strategy research at Huatai Futures, said that this positive signal is expected to improve market risk appetite and ease the pessimism on the demand side for the market in the down cycle.

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