Iron Ore and A-share Market Weekly Report and Global Capital Market Weekly Report 20231218
Overall
• Short-term high ore supply has been maintained, and superimposed steel companies have maintained the pace of production cuts in the off-season. Actual ore fundamentals have weakened marginally, but thanks to steel companies' inventory replenishment operations, there is little downward pressure on ore prices. Around January next year, steel companies will resume production after maintenance. Combined with overseas weather disturbances on the supply side, phased mineral prices will be supported.
On the supply side
• Global shipments of 32.899 million tons, an increase of 328,000 tons over the previous month, of which Australia shipped 20.105 million tons, an increase of 2.95 million tons over the previous week, Brazil shipped 7.344 million tons, a decrease of 2.143 million tons over the previous month, and non-mainstream shipments of 5.45 million tons, a decrease of 434,000 tons over the previous month.
• Global ore shipments remain high. There is a possibility that offshore wind will increase at the Western Australian shipping port in the second half of December, which is expected to affect Australian ore shipments. Due to the concentration of ports and weather factors affecting domestic port operations, the current ore pressure on the port hit a new high during the year. Later, port weather conditions improved. It is expected that unloading capacity will increase and the resources pressurized at the port will decrease.
Demand side
• The operating rate of blast furnaces in 247 steel mills was 78.31%, down 0.44% month-on-month, up 2.34% from last year; blast furnace ironmaking capacity utilization rate was 84.83%, down 0.91% month-on-month; steel mill profitability was 35.5%, down 1.73% month-on-month; average daily iron and water production was 2.268,600 tons, down 24,400 tons month-on-month.
• The policy side has no significant impact on steel companies' production, and there has been no significant change in the profit level of steel companies. Maintaining a tight balance of profit and loss, in the context of the off-season, steel companies' seasonal production cuts have been maintained, and judging from the steel companies' maintenance plans, there is still room for decline in iron and water production before the end of the year. It is expected that steel companies will resume production at the end of January next year.
In terms of inventory
• The total amount of imported iron ore stocks in 47 ports across the country was 122.1619 million tons, a year-on-month decrease of 2,5078 million tons. The average daily evacuation volume of 47 ports was 32.074 million tons, an increase of 76,800 tons over the previous month. $SSIF DCE Iron Ore Futures Index ETF(03047.HK$
This week's A-share weekly report:
1. The popularity of market transactions has declined, and the popularity of transactions in the media and consumer services sectors is relatively high.
2. All A's 23/24 net profit forecasts continue to be lowered.
3. The activity of Liangrong has rebounded slightly, but it is still below the central level during the year. Positions of actively biased funds have rebounded. Proxy variables show that the citizens as a whole continue to purchase funds on a net basis.
4. The overall buying consensus in the market rebounded slightly last week. Buying consensus was relatively high in sectors such as textiles, electricity, and utilities, followed by sectors such as pharmaceuticals, communications, trade and retail, and automobiles.
5. Currently, the “transactional” characteristics of various types of investors in the market continue, which means that the market is still facing “disturbances” at the transaction level, and various sectors may still be in a state of “loss of strength” between sectors. $BABA-SW(09988.HK$ $XIAOMI-W(01810.HK$
Global Capital Markets Weekly Report:
What do the Fed's accelerated interest rate cuts and lower oil prices mean for China? Our US economy team changed their views on the Federal Reserve after the FOMC meeting last week, and we expect to cut interest rates 5 times next year.
Over the weekend, our commodities team lowered the oil price forecast. These changes have affected China in three ways. The fall in US interest rates and the weakening of the US dollar have eased the pressure on the renminbi and the People's Bank of China's restrictions on foreign exchange stability. We lowered the USD/RMB exchange rate forecast for the 3/6/12 month period from 7.30/7.30/7.15 to 7.15/7.10/7.05, and continue to expect the People's Bank of China to relax monetary policy by cutting deposit reserve ratios and interest rates next year.
Second, due to falling oil prices, we have lowered some inflation expectations. Next year's CPI inflation rate is expected to be +0.5%, and PPI inflation is -0.3%. Third, if central banks outside of China can start a cycle of interest rate cuts faster and more quickly, thereby boosting external demand, then this will play a marginal role in supporting China's exports and economic growth.
• Short-term high ore supply has been maintained, and superimposed steel companies have maintained the pace of production cuts in the off-season. Actual ore fundamentals have weakened marginally, but thanks to steel companies' inventory replenishment operations, there is little downward pressure on ore prices. Around January next year, steel companies will resume production after maintenance. Combined with overseas weather disturbances on the supply side, phased mineral prices will be supported.
On the supply side
• Global shipments of 32.899 million tons, an increase of 328,000 tons over the previous month, of which Australia shipped 20.105 million tons, an increase of 2.95 million tons over the previous week, Brazil shipped 7.344 million tons, a decrease of 2.143 million tons over the previous month, and non-mainstream shipments of 5.45 million tons, a decrease of 434,000 tons over the previous month.
• Global ore shipments remain high. There is a possibility that offshore wind will increase at the Western Australian shipping port in the second half of December, which is expected to affect Australian ore shipments. Due to the concentration of ports and weather factors affecting domestic port operations, the current ore pressure on the port hit a new high during the year. Later, port weather conditions improved. It is expected that unloading capacity will increase and the resources pressurized at the port will decrease.
Demand side
• The operating rate of blast furnaces in 247 steel mills was 78.31%, down 0.44% month-on-month, up 2.34% from last year; blast furnace ironmaking capacity utilization rate was 84.83%, down 0.91% month-on-month; steel mill profitability was 35.5%, down 1.73% month-on-month; average daily iron and water production was 2.268,600 tons, down 24,400 tons month-on-month.
• The policy side has no significant impact on steel companies' production, and there has been no significant change in the profit level of steel companies. Maintaining a tight balance of profit and loss, in the context of the off-season, steel companies' seasonal production cuts have been maintained, and judging from the steel companies' maintenance plans, there is still room for decline in iron and water production before the end of the year. It is expected that steel companies will resume production at the end of January next year.
In terms of inventory
• The total amount of imported iron ore stocks in 47 ports across the country was 122.1619 million tons, a year-on-month decrease of 2,5078 million tons. The average daily evacuation volume of 47 ports was 32.074 million tons, an increase of 76,800 tons over the previous month. $SSIF DCE Iron Ore Futures Index ETF(03047.HK$
This week's A-share weekly report:
1. The popularity of market transactions has declined, and the popularity of transactions in the media and consumer services sectors is relatively high.
2. All A's 23/24 net profit forecasts continue to be lowered.
3. The activity of Liangrong has rebounded slightly, but it is still below the central level during the year. Positions of actively biased funds have rebounded. Proxy variables show that the citizens as a whole continue to purchase funds on a net basis.
4. The overall buying consensus in the market rebounded slightly last week. Buying consensus was relatively high in sectors such as textiles, electricity, and utilities, followed by sectors such as pharmaceuticals, communications, trade and retail, and automobiles.
5. Currently, the “transactional” characteristics of various types of investors in the market continue, which means that the market is still facing “disturbances” at the transaction level, and various sectors may still be in a state of “loss of strength” between sectors. $BABA-SW(09988.HK$ $XIAOMI-W(01810.HK$
Global Capital Markets Weekly Report:
What do the Fed's accelerated interest rate cuts and lower oil prices mean for China? Our US economy team changed their views on the Federal Reserve after the FOMC meeting last week, and we expect to cut interest rates 5 times next year.
Over the weekend, our commodities team lowered the oil price forecast. These changes have affected China in three ways. The fall in US interest rates and the weakening of the US dollar have eased the pressure on the renminbi and the People's Bank of China's restrictions on foreign exchange stability. We lowered the USD/RMB exchange rate forecast for the 3/6/12 month period from 7.30/7.30/7.15 to 7.15/7.10/7.05, and continue to expect the People's Bank of China to relax monetary policy by cutting deposit reserve ratios and interest rates next year.
Second, due to falling oil prices, we have lowered some inflation expectations. Next year's CPI inflation rate is expected to be +0.5%, and PPI inflation is -0.3%. Third, if central banks outside of China can start a cycle of interest rate cuts faster and more quickly, thereby boosting external demand, then this will play a marginal role in supporting China's exports and economic growth.
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3047 is a team specializing in the research of commodities and smart beta. We like to exchange investment strategies.
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