FangQuant › Daily Morning

Daily Market Review on Specified Futures Products 2020.11.17

Fang submitted 2020-11-17 14:32:10

Crude oil

Crude oil: OPEC technical committee recommends postponing production increase.

The recent rapid resumption of production in Libya and the re-closure in Europe. Logically speaking, the crude oil spot market in the Atlantic Basin should weaken. However, in terms of spot discounts, the Mediterranean, West African and North Sea crude oil discounts have not weakened significantly. The discount has not expanded. An important reason is that the import demand in the Asia-Pacific region has balanced the excess of local crude oil in the Western Region. At present, China and India have returned to West Africa and the Mediterranean. On the other hand, the supply in the Middle East is relatively tight. Iraq's December long-term contract cargo supply has been reduced. Recently, the spot discounts of Pakistan market strengthened. The tight supply in the Middle East has also increased the buying power of the West Region crude oil in the Asia-Pacific region (especially when Brent Dubai EFS is relatively low., The price of crude oil in the west area is higher).

Strategy: Neutral, it is advised to hold the current position,

Risk: No

Iron Ore

On November 16, 2020, the position on I2101 contract increased by 8132 and closed at ¥838.5 per ton, the position on I2105 contract increased by 3905 and closed at ¥768.5 per ton, the spread of Iron 1-5 contract is 70.0. In terms of spot, the PB powder in Rizhao Port was ¥855 per ton, BRBF price warehouse receipt equivalent to ¥913 per ton, the price of Karara was ¥887 per ton, the best delivery Karara was equivalent to ¥870 per ton.

Important Information

1 Mysteel: According to the media reports, Tata Steel Ltd. (Tata Steel Ltd.) is negotiating with Swedish steel manufacturer SSAB and is considering selling its Dutch subsidiary to reduce the burden of its European business losses on the group.

2. Mysteel: According to the official data released by Australian Pilbara Port Authority, the total amount of iron ore sent from Australia to China in October was 39.72 million tons, an increase of 10.5% year-on-year, and the shipment volume was basically the same as in September. The total shipment volume from Port Hedland to the world in October was 46.48 million tons, a year-on-year increase of 10%, and the month-on-month shipment volume increased by 2%.

Trading Strategy

1. Last week, the stock of imported iron ore in 45 ports dropped slightly, down by about 300,000 tons year-on-year. In terms of volume, the stock of Australian mines decreased, and the Brazilian mine continued to accumulate. In terms of varieties, pellets and lump ore decreased significantly, and coarse powder increased. The total stock of imported iron ore from steel mills was 110,639,400 tons, a month-on-month decrease of about 710,000 tons. The daily consumption of imported iron ore from steel mills decreased slightly, and inventory consumption was relatively low. At present, the contradiction between supply and demand of iron ore is not obvious. The price increase is mainly driven by the downstream building materials. Threaded hot coils continue to be de-stocked, and the de-stocking range is relatively large, and the current steel inventory is low. There is a high probability of destock in the later period and there is space for price to increase in the later period. In terms of valuation, the basis difference in recent month is relatively large, and there is a higher probability that the follow-up inventory will repair the discount upwards. It is recommended to long 01 iron ore contract and short 05 threads contract.

2. Option strategy: It is advised to hold the short position on i2101-C-880 and hold the short position on i2102-P-800. (For reference only)


PTA: Production and sales of polyester remain weak.

We will continue to estimate the de-stocking, follow up by the implementation of the overhaul and the continuity of demand improvement. A small de-stocking can be achieved in November while there is an expectation of rigid accumulation December.

In terms of the unilateral strategy, it is advised to be neutral; for the strategy across varieties, the current TA pattern is long in short-term and short in long-term, in late October, there is a chance to continue the rebound; in addition, the accumulated warehouse concerns from November to December followed by the peak of seasonal terminal loaded, and the rebound gives space for varieties allocation; for strategy across period, it is advised to focus on the reverse cash and carry strategy opportunity after the next round of TA overhauls fulfilling and rebound of 1-5 spread. It is advised to focus on PTA factory inspection and fulfillment wishes, and the downstream restocking space and improvement of demand.

Natural Rubber

Rubber: Market recovered, rubber prices continue to rebound

On November 16, the most active traded RU contract closed at 14,6555 (+270) yuan/ton, the price of mixed rubber was 11,750 (+250) yuan/ton, the basis of most active traded contract was -680 yuan/ton (+90); the open interest of top 20 active traded long positions was 81,262 (-383) lots, the open interest of top 20 active traded short position 100,424 (-740) lots, and the net short position was 19,162 (-357).

On November 16, the most active traded NR contract closed at 10,680 (+70) yuan/ton, the STR in Qingdao Free Trade Zone was 1,620 (+25) US dollars/ton, the SMR was 1,625 (+30) US dollars/ton, and the SIR was 1,565 (+55) US dollars/ton. The basis of most active traded contract was -343 (+224) yuan/ton.

As of November 13: the total inventory of the exchange was 260,806 (+7296) lots, and the warehouse receipts of exchange were 228,090 (+3090) lots.

As of November 12, raw materials: sheet rubber 62.39 (0), cup lump 39.3 (+0.3), latex 53.3 (+3.3), RSS3 66.86 (+0.1).

As of November 12, the domestic all-steel tire operating rate was 75.26% (-0.13%), and the domestic semi-steel tire operating rate was 71.03% (-0.2%).

Viewpoint: Rubber prices maintained their rebound momentum yesterday. After the price of raw materials stopped falling and stabilized last week, the cost support under rubber appeared. In the same time, due to the rebound of crude oil and the warming of the market atmosphere, the prices remained strong and volatile. Yesterday, the price of raw materials in Thailand's main producing areas maintained a slight increase. The recent decrease in arrival inventory and the rigid delivery of downstream goods have brought about the continued depletion of inventories outside the Qingdao Free Trade Zone, which is beneficial to the price of dark rubber. At present, the price of raw materials in the main producing areas has stopped falling and stabilized, providing good support for rubber prices in the short-term. The basis continues the strong momentum of last week, indicating that downstream demand is acceptable, and it is recommended to participate in the short term. Later, it is suggested to pay attention to the impact of the US epidemic.

Strategy: Be Caution om the short term

Risk: Production and inventory accumulated substantially, and demand dropped significantly.

Currently no Comments.