Iron Ore and A-share Market Weekly Report and Global Capital Market Weekly Report 20240102
Overall
• Weather disturbances are coming to an end. Although ore shipments will experience a seasonal decline, domestic arrival levels are likely to remain high for the next 23 weeks, and the pressure on ore supply will not abate. Entering January, the resumption of production by steel companies increased, and iron and water output is expected to gradually pick up. At the same time, considering the approach of the Spring Festival and steel companies' demand for raw material reserves, demand for ore is expected to improve marginally. $SSIF DCE Iron Ore Futures Index ETF(03047.HK$
On the supply side
• Global shipments of 35.299 million tons, an increase of 2.341 million tons, of which Australia shipped 2.021 million tons, an increase of 1,218,000 tons, Brazil shipped 8.591 million tons, an increase of 721,000 tons over the previous month, and 6.49 million tons of non-mainstream shipments, an increase of 400,000 tons over the previous month.
• Under the common dominance of high mineral prices and limited influence of weather factors, global iron ore shipments remained high, especially in non-mainstream production areas. Shipments were significantly higher than during the year and during the same period. Looking at the later stages, Brazil will still have an obvious rainfall process in the next week, but the impact on Brazilian production and shipping is expected to be limited. The decline in shipments is more an effect of the end of the season's year-end impulse.
Demand side
• The blast furnace operating rate of 247 steel mills was 75.19%, down 2.52% from the previous week; the utilization rate of blast furnace iron production capacity was 82.75%, down 2% from the previous week; the profit rate of steel mills was 28.14%, down 5.63% from the previous month; the average daily iron and water production was 2,212,800 tons, down 53,600 tons from the previous month, down 1.23% year on year.
• In addition to the off-season, the decline in iron and water production by steel companies is compounded by the impact of steel companies' profit compression and production restrictions in Jiangsu. According to steel companies' maintenance plans, production will mainly resume after January, but as domestic weather conditions improve, air quality has deteriorated. Concerned about its disturbance in steel companies' production, it is expected that the average daily iron output will gradually rise.
In terms of inventory
• Imported iron ore stocks in 45 ports across the country were 11.917,300 tons, an increase of 1.0497 million tons over the previous month; the average daily dredging volume was 2.981,400 tons, an increase of 431,900 tons. In terms of volume, Australian mines were 52.887 million tons, an increase of 561,500 tons; Brazilian mines were 46.887 million tons, a decrease of 2183,000 tons; and the number of ships in port decreased by 25 from 123.
This week's A-share weekly report:
1. Key to dealing with early spring market operations
Judging the subsequent trend of the market: The current market is relatively slow, and it is not logical to pursue the rise. We should grasp the pace and be wary of a possible sharp pullback.
2. Tencent stock price and spring market
The rebound was weak due to damage to Tencent's technical structure: Tencent's technical structure deteriorated after a major downturn, and even if subsequent negative news was eliminated, the rebound would not be particularly strong.
The overfalling sector showed a rebound: The overall market showed a sharp rebound last week. Sectors such as brokerage, chips, and pharmaceuticals were well structured and adjusted, showing a bottom-up divergence. The general management and infrastructure decline structures were perfect, and the decline in some financial stocks, such as Ping An Bank, is nearing its end.
The mid-term bottom of the market has yet to be confirmed. Market confidence is still in a short-term trading mentality, and floating capital operations will still dominate the mainstream from January to May this year. $TENCENT(00700.HK$ $BEIGENE(06160.HK$
3. Master the Spring Market Operation Strategy
Market trend prediction: Since the current round of market decline is due to interest rate differences and capital outflows due to risk aversion, when to return to a stable state depends on the interest rate balance between China and the US and the impact of risk aversion.
Impact of the Ningde era: The Shanghai and Shenzhen 300 Index contributed more than 6% of the decline since December '21 due to the sharp drop in stock prices during the Ningde era, which had a significant impact on the index. However, since electric vehicle sales in 2024 have already entered the middle stage and are expected to shift from rapid growth to medium growth, a rapid rebound in the Ningde era is unlikely to occur in the first half of this year.
Resistance level analysis: The main market position is estimated to be around 3050. Market confidence and investors' long-term expectations have not recovered, so we are looking forward to the second half of the year.
Global Capital Markets Weekly Report:
We wish all of our readers health, happiness, and prosperity in 2024.
The major surprise of 2023 was that global economic growth surpassed expectations by a large margin (exceeding expectations by 1 percentage point) and the rapid normalization of inflation in the second half of the year. The unexpected increase in growth reflects the weakening of monetary policy austerity (because the lag time between changes in financial conditions to economic growth is much shorter than generally believed), and that the recovery in income growth has kept consumer spending growth steady.
Despite steady economic growth, progress in inflation highlights the unique nature of this cycle. Although the unemployment rate is still low, labor market rebalancing is progressing smoothly as excess job vacancies are lifted, and labor supply has exceeded expectations (all due to good employment prospects and a rebound in immigration). Coupled with improvements in global supply conditions (reducing core commodities and overall inflation), this has eased upward pressure on wage growth, which should stabilize at a sustainable level over the next year.
As inflation nears the finish line, the threshold for cutting interest rates has been lowered, and the central bank should begin normalizing policies next year. As the “soft landing” unfolds and economic conditions return to normal levels, we remain concerned about the long-term drivers of the economic outlook, including the upward growth potential of generating artificial intelligence.
• Weather disturbances are coming to an end. Although ore shipments will experience a seasonal decline, domestic arrival levels are likely to remain high for the next 23 weeks, and the pressure on ore supply will not abate. Entering January, the resumption of production by steel companies increased, and iron and water output is expected to gradually pick up. At the same time, considering the approach of the Spring Festival and steel companies' demand for raw material reserves, demand for ore is expected to improve marginally. $SSIF DCE Iron Ore Futures Index ETF(03047.HK$
On the supply side
• Global shipments of 35.299 million tons, an increase of 2.341 million tons, of which Australia shipped 2.021 million tons, an increase of 1,218,000 tons, Brazil shipped 8.591 million tons, an increase of 721,000 tons over the previous month, and 6.49 million tons of non-mainstream shipments, an increase of 400,000 tons over the previous month.
• Under the common dominance of high mineral prices and limited influence of weather factors, global iron ore shipments remained high, especially in non-mainstream production areas. Shipments were significantly higher than during the year and during the same period. Looking at the later stages, Brazil will still have an obvious rainfall process in the next week, but the impact on Brazilian production and shipping is expected to be limited. The decline in shipments is more an effect of the end of the season's year-end impulse.
Demand side
• The blast furnace operating rate of 247 steel mills was 75.19%, down 2.52% from the previous week; the utilization rate of blast furnace iron production capacity was 82.75%, down 2% from the previous week; the profit rate of steel mills was 28.14%, down 5.63% from the previous month; the average daily iron and water production was 2,212,800 tons, down 53,600 tons from the previous month, down 1.23% year on year.
• In addition to the off-season, the decline in iron and water production by steel companies is compounded by the impact of steel companies' profit compression and production restrictions in Jiangsu. According to steel companies' maintenance plans, production will mainly resume after January, but as domestic weather conditions improve, air quality has deteriorated. Concerned about its disturbance in steel companies' production, it is expected that the average daily iron output will gradually rise.
In terms of inventory
• Imported iron ore stocks in 45 ports across the country were 11.917,300 tons, an increase of 1.0497 million tons over the previous month; the average daily dredging volume was 2.981,400 tons, an increase of 431,900 tons. In terms of volume, Australian mines were 52.887 million tons, an increase of 561,500 tons; Brazilian mines were 46.887 million tons, a decrease of 2183,000 tons; and the number of ships in port decreased by 25 from 123.
This week's A-share weekly report:
1. Key to dealing with early spring market operations
Judging the subsequent trend of the market: The current market is relatively slow, and it is not logical to pursue the rise. We should grasp the pace and be wary of a possible sharp pullback.
2. Tencent stock price and spring market
The rebound was weak due to damage to Tencent's technical structure: Tencent's technical structure deteriorated after a major downturn, and even if subsequent negative news was eliminated, the rebound would not be particularly strong.
The overfalling sector showed a rebound: The overall market showed a sharp rebound last week. Sectors such as brokerage, chips, and pharmaceuticals were well structured and adjusted, showing a bottom-up divergence. The general management and infrastructure decline structures were perfect, and the decline in some financial stocks, such as Ping An Bank, is nearing its end.
The mid-term bottom of the market has yet to be confirmed. Market confidence is still in a short-term trading mentality, and floating capital operations will still dominate the mainstream from January to May this year. $TENCENT(00700.HK$ $BEIGENE(06160.HK$
3. Master the Spring Market Operation Strategy
Market trend prediction: Since the current round of market decline is due to interest rate differences and capital outflows due to risk aversion, when to return to a stable state depends on the interest rate balance between China and the US and the impact of risk aversion.
Impact of the Ningde era: The Shanghai and Shenzhen 300 Index contributed more than 6% of the decline since December '21 due to the sharp drop in stock prices during the Ningde era, which had a significant impact on the index. However, since electric vehicle sales in 2024 have already entered the middle stage and are expected to shift from rapid growth to medium growth, a rapid rebound in the Ningde era is unlikely to occur in the first half of this year.
Resistance level analysis: The main market position is estimated to be around 3050. Market confidence and investors' long-term expectations have not recovered, so we are looking forward to the second half of the year.
Global Capital Markets Weekly Report:
We wish all of our readers health, happiness, and prosperity in 2024.
The major surprise of 2023 was that global economic growth surpassed expectations by a large margin (exceeding expectations by 1 percentage point) and the rapid normalization of inflation in the second half of the year. The unexpected increase in growth reflects the weakening of monetary policy austerity (because the lag time between changes in financial conditions to economic growth is much shorter than generally believed), and that the recovery in income growth has kept consumer spending growth steady.
Despite steady economic growth, progress in inflation highlights the unique nature of this cycle. Although the unemployment rate is still low, labor market rebalancing is progressing smoothly as excess job vacancies are lifted, and labor supply has exceeded expectations (all due to good employment prospects and a rebound in immigration). Coupled with improvements in global supply conditions (reducing core commodities and overall inflation), this has eased upward pressure on wage growth, which should stabilize at a sustainable level over the next year.
As inflation nears the finish line, the threshold for cutting interest rates has been lowered, and the central bank should begin normalizing policies next year. As the “soft landing” unfolds and economic conditions return to normal levels, we remain concerned about the long-term drivers of the economic outlook, including the upward growth potential of generating artificial intelligence.
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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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