Crude oil

Crude oil: The destocking trend has become normal, the crude oil supply and demand maintain a weak balance
From the perspective of the current oil balance sheet, there is not much contradiction between the current supply and demand of crude oil, but the rhythm of destocking has changed from a large destocking to a moderate destocking. The supply and demand gap of the balance sheet has narrowed, as OPEC still maintains a moderate increase in production, supply growth is still relatively limited. Although the current outbreak of the epidemic has brought greater uncertainty to the demand side, considering that the vaccine has been approved for marketing, the current epidemic will only delay the pace of demand recovery. This year's demand recovery trend is still relatively certain. Therefore, in general, a weak balance between supply and demand will remain in the first quarter, with a small gap between supply and demand or a tight balance between supply and demand.
Strategy: Be neutral or hold the current position.

Risk: No (For reference only)

Iron Ore
Iron Ore

The position on I2101 contract closed at ¥1079 per ton, the position on I2105 contract closed at ¥996 per ton, the spread of Iron 1-5 contract is 83, the spread of Iron 5-9 contract is 72.5. In terms of spot, the PB powder in Rizhao Port was ¥1,084 per ton. The price of Karara in Rizhao Port was ¥1150 per ton, the discounted warehouse price was ¥1160 per ton, the price of mixed powder warehouse receipt was ¥1140 per ton.

【Important News】

1. Mysteel: The inventory of imported iron ore in 45 ports across the country was 12,415.95, an increase of 7.27 from last week. The average daily port volume was 280.10 dropped by 23.86. In terms of weight volume, Australian ore was 5,916.50 increased by 54.2, Brazil ore was 4,078.40 decreased by 61.4, the traded ore increased by 18.2, pellet was 650.26 decreased by 13.89, fine powder was 1006.39 decreased by 0.4, lump ore was 2251.28 decreased by 62.03, coarse powder increased by 83.59; the number of ships in port was 158 increased by 3. (Unit: 10,000 tons)
2. Mysteel: The total imported iron ore inventory of the sample steel plants is 114.65 million tons, a decrease of 458,500 tons from the previous month. The current daily consumption of imported ore of the sample steel plants is 3.0357 million tons, an increase of 0.38 million tons from the previous month and the inventory consumption ratio is 37.77. A month-on-month decrease of 0.20.
3. Mysteel: Last week, the blast furnace operating rate of surveyed 247 steel plants was 86.07%, an increase of 0.52% from last week and 0.91% from the same period last year. The utilization rate of blast furnace ironmaking capacity was 92.08%, an increase of 0.21% from the previous month, and an increase of 5.75% from the same period last year. The profit rate of the plant was 90.48%, a decrease of 0.43% month-on-month and a year-on-year decrease of 3.90%. the average daily molten iron output was 2.4510 million tons, an increase of 5600 tons from the previous month and an increase of 153,000 tons year-on-year.

【Trading strategy】

1. At present, the total iron ore port inventory is 12416 million tons, a slight increase of about 70,000 tons from last week. In terms of weight volume, Australian mines have increased while Brazilian mines have decreased. In terms of varieties, the coarse powder continued to accumulated, while the remaining varieties fell. In terms of shipping, there will be maintenance plans for the berths in Australian and Brazil ports in the later period and the amount of maintenance affected is unknown. On the demand side, due to the large-scale drop in temperature, steel mills and ports have reduced the cargo and the average daily port dredging has decreased. The average daily iron production has slightly increased from 0.56 to 245.10, steel mills still have production power. The number of ships in port increased from 3 to 158. It is expected that the iron ore will follow the material fluctuation and become weak. In the short term, it is suggested to pay attention to the market price adjustment and pay attention to the level below 975. (for reference only)

PTA

PTA: Upstream PX is strong, PTA still has cost support
Gradually enter the seasonal accumulation period from January to February. In terms of the unilateral strategy, it is advised to be cautions due to covid-19. For the strategy across the period, arbitrage opportunity is ready. For the risk, there will be a decrease on the rate of polyester before the spring festival.

Natural Rubber
Rubber: Waiting for the demand to stabilize, the opportunity is limited
The rubber prices fluctuated weakly last week. In the second half of the week, as the market atmosphere warmed up again, prices stabilized. The short-term pressure on rubber mainly came from the demand side. The operating rate of domestic tire factories declined significantly, causing short-term raw material demand to weaken. Japanese rubber weakened during the holidays and the risk of overseas epidemics still exists. The total inventory of domestic exchanges as of December 31 was 172,862 tons (+2042), and the amount of futures warehouse receipts was 160,570 tons (+1800). The domestic stocks were completely stopped last week, and the increase in warehouse receipts has continued to slow down recently. As of December 27, inventory in Qingdao Free Trade Zone has rebounded slightly, mainly due to the decline in the operating rate of domestic tire factories. The spot market price still fell mainly last week. According to Zhuochuang’s understanding, the overall start-up of terminal factories has remained low due to heating and power restrictions and the weakening of the demand margin has led to a decline in the price of raw materials. Most factories focus on picking as they are used. Some factories replenish their positions on dips and purchase sporadic purchases. The overall inventory is more active. difference. The price at Qingdao Free Trade Zone fell. At the beginning of the week, the market activity increased slightly. Some downstream purchases or traders exchanged goods, and the trading was fair. As New Year's Day approaches and foreign markets are closed, Thursday's market offers are sporadic. The center of gravity of the external market has fallen, and terminal factories have been sluggish. The sentiment for the purchase of US dollar cargo is not good; in addition, the supply of raw materials in Thailand is relatively stable, but the current lack of profit in standard rubber processing due to the continuous high raw materials, coupled with weak domestic order demand, processing plants The low production enthusiasm has increased the pressure on the sales of raw materials, and the focus of the purchase price of glue has dropped significantly, driving the loosening of the US dollar market. As of last weekend, the premium of rubber synthetic rubber was 2075 yuan/ton (-275), and the price of rubber fell, which led to the widening of the price difference last week.

Viewpoint: The main domestic production areas have entered a full shutdown period. The increase in domestic full latex is limited, which provide a strong support on Shanghai latex. However, due to the impact of rain in the overseas main production areas in Thailand, the output of new rubber has been suppressed, and the supply side is generally weak. Due to the decline in arrivals, the domestic out-of-region inventory generally maintained a downward trend. Last week, as domestic demand continued to weaken, the decline in outbound inventory caused a slight rebound in out-of-region inventory. However, the air in Shandong improved, the easing of the environmental protection warning may lead to the recovery of the operating rate of tire factories in the later stage, but the focus is still on export orders. The short-term container tension problem has not been resolved. Tire factories are more considering the pressure of finished products inventory, and the operating rate may be difficult to rise to the previous high level. Under the support of raw materials, the overall rubber has limited room for adjustment, waiting for the demand becomes stabilized. In terms of downstream tire operating rate, as of December 31, the operating rate of all-steel tire companies was 54.89% (-2.16%), and that of semi-steel tire companies was 54.91% (-2.07%). After the domestic cold air came, the air quality in Shandong area improved and the environmental protection warning eased may make the tire factory operating rate rise again in the later period, but the focus is still on export orders. The short-term container shortage problem has not been resolved. Tire factories are more considering cost inventory pressure and operating rate. It may be difficult to recover to the previous high level.

Strategy: Neutral

Risks: The increase in supply brought about a sharp rebound in inventory, the epidemic and other impacts, demand continued to weaken and funds balance were tight

Copper

Copper

LME copper prices fluctuated and closed at $7753.5/ton, down by $65.5/ton, a decrease of 0.84%, and increased from 539 lots to 311,000 lots

【Important Information】

1. Senate Majority Leader McConnell once again disagree to vote on the personal bailout subsidy to be increased to $2,000, calling the plan "socialism for the rich." In addition, the Senate voted to overturn Trump’s veto of the defense bill
2. Jiangxi Province's first ticket of recycled copper that meets national standards has completed customs clearance. Yingtan Customs released news on the 31st that 95.7 tons of recycled copper declared by a local copper company to import was successfully cleared at Yingtan Customs
【Trading Strategy】

1. At present, the market has basically digested the benefits of the stimulus policy. Entering January, the consumption of copper has deteriorated. The consumption of some large cable companies has declined by more than 20%. In addition, the imported scrap copper has begun to flow into the domestic market. The spot market has begun to weaken. Spot premiums and discounts have begun to be weak and the copper market has begun to build up. Copper prices may enter a state of shock.

2. Arbitrage: Hold the current position.

3.Options: Short on cross-market options, CU2102-C-60000, CU2102-P-54000. (For reference only)