The core logic of "strong" mining lies in chengcai

February 21, after yesterday's rise in the black group, iron ore, rebar futures continue to continue the upward trend, as of press, iron ore main contract up 1.9%, rebar main contract up more than 1%. Minmetals jingyi futures senior black researcher Chen bingkun told the futures daily reporter that the black line of recent market logic has been very clear. Due to the impact of the epidemic, transportation is limited, and it will be some time before the complete resumption of production and demand is released. Meanwhile, the high steel mill inventory, the supply precipitation, the compression of steel mill profits and the continued decline in production, together with the macro monetary easing policy, have resulted in the strong iron ore price.

"The demand reality and expectations of the game, as well as macro policy stimulus is the source of rebar futures price rise." Chen bingkun said that under the background of the reality and expectations of the near weak far strong, the logical evolution of the future black market will evolve in two directions around the fact that demand is suppressed near the freezing point and the future release expectations.

Notably, Mr Chen pointed out that steel inventories are now at record highs and there is still a possibility of hitting higher levels. "There is no shortage of supply. Even if future demand gets better, there is still a great deal of uncertainty about the rate at which demand will be released.

"We need to recognize the reality that the iron ore demand contraction has not resulted in the corresponding steel shrinkage, and the demand decline is not as expected. Under the background of the linkage between macro expectations and industrial chain prices, the re-speculation of topics such as Australian monsoon and Brazilian production has become the driving force for the ore rise." Chen bingkun said, although the demand contraction is less than expected, but there is no increment, the supply side of the future delivery into the seasonal increment, so the ore short-term strength, height and strength is uncertain.

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