Crude oil

Crude oil: the cold wave premium has subsided, the market is concerned about the prospects of the OPEC meeting

Oil prices have fallen for two consecutive days. We have noticed that the drop in oil distribution is significantly greater than that of U.S. oil. We believe this is mainly due to the disappearance of the pre-cold wave premium. The logistics interruption caused by the US cold wave before has led to a decline in U.S. crude oil exports and a decline in exports to Europe. The export of WTI crude oil to the United States is very important to European refineries. It is about 1 to 1.5 million barrels per day. It is an important arbitrage cargo. The short-term decline in U.S. exports has supported the physical premium, monthly difference, DFL and CFD of oil distribution. The price of other derivatives (the spread between U.S. oil and Dubai crude oil has widened), but at the same time, the physical discount of Ural crude oil has continued to fall. This reflects that the previous supply shortage in the North Sea was more structural. Relatively tight and relatively surplus of sour oil (which is also related to the strengthening of gasoline gap and the conversion of refineries). Therefore, after the cold wave passed, the logic of Brent's premium gradually faded. The market is concerned about the prospects of the OPEC meeting and the recovery of China's demand. As long as OPEC's production increase does not exceed expectations, we believe that the logical basis for supply growth to be lower than demand growth still exists.

Strategy: Tend to long position, but be cautious. Brent intertemporal positive set or unilateral multi-match

Risks: Iranian oil returns to the market ahead of schedule, OPEC increases production beyond expectations

Iron Ore
Iron Ore

The price of iron ore futures decreased, the position on I2105 contract closed at ¥1129.5 per ton, the spread of Iron 5-9 contract is 118.5.

In terms of spot, the PB powder in Rizhao Port was ¥1,164 per ton, the discounted SSF price was ¥1228 per ton.

【Important Information】

1. Mysteel: From February 22 to 28, the total arrivals from 45 ports in China was 22.047 million tons, an increase of 981,000 tons from the previous month; the total arrivals from the 6 ports in the north were 10.972 million tons, an increase of 163,000 tons from the previous month. The total arrival volume of 26 ports in China was 21.366 million tons, a month-on-month increase of 1.436 million tons.

2. According to foreign media reports, the first batch of iron ore from the Sanjiv Ridge mining area of Atlas Mining Company in Australia was transported by road to Port Hedland for shipment. It is reported that the estimated reserves of the mine are 64 million tons of iron ore with an iron grade of 57.2% and 29 million tons of iron ore with an iron grade of 57%.

3. According to foreign media reports, AngloAmerican plans to extend its mining operations at the Kumba iron ore mine in South Africa for another 10 years. Earlier, Kumba announced that it had received approval for a project worth R3.6 billion (US$240 million), which will extend the mining of the Sishen mining area to 2039.

4. Mysteel: Brazil’s Vale’s fourth-quarter earnings recorded US$4.9 billion in provision costs related to the Brumadinho dam disaster, but its ferrous metal division remains strong, and the mine remains optimistic about the future expectations of its main products

【Trading strategy】

1. At present, the iron ore inventory of 45 ports is 126 million tons, a decrease of about 620,000 tons from the previous month. Among them, the Australian mines are accumulating and the Brazilian mines are decreasing. In terms of varieties, the coarse powder continues to accumulate, and the pellets are decreasing. As expected, the arrivals to the port this week rebounded slightly, and the subsequent reductions are expected; the global iron ore shipments in February decreased as a whole compared with January. On the demand side, the output of molten iron from 247 companies increased by 2,500 to 2,456,300 tons, and the operating rate of blast furnaces dropped slightly. At present, the inventory level in steel mills is higher than that of the same period. The rigid replenishment is not as strong as expected. The downstream material accumulation has slowed down. Affected by the convening of the "two sessions", restrictions in Hebei have gradually become stricter, and port traffic has dropped significantly. Ports restrict port dredging, demand capacity is limited, and the recovery of terminal demand remains to be seen. In the case of no significant increase in iron ore on the supply side, in the medium and long term, it is still suitable as a long-term configuration in the black series. In the short term, the market might be expected to fluctuate. Strategically, it is recommended to close positions or hold the current positions before the meeting.

(For reference only)

PTA
PTA: The recovery of the energy and chemical sector drives the decline of PTA, and the production and sales of polyester decline

TA maintenance plans are concentrated in March-April, and TA processing fees are expected to bottom out for the first time, and TA processing fees are expected to bottom out; however, PX will accumulate slightly from March-April, but there are still expectations for maintenance and de-stocking in May-June. Processing fees including left-hand transactions are relatively strong, and the mid-line standard PTA continues to increase in cost.

Strategic recommendations: (1) Unilateral: hold the current position, over-rise callback, temporarily hold the current position (2) Intertemporal: hold the current position.

Risks: The implementation of the PTA plant maintenance plan from March to April, and the continued improvement of the supply and demand of aromatics due to the gasoline premium.

Natural Rubber
Rubber: After the release of macro sentiment, the price of rubber fluctuates within a narrow range

On Mar 1, the main RU closing price was 15,895 (-95) yuan/ton, the price of mixed rubber was 12,800 yuan/ton (-100), the main contract basis was -420 yuan/ton (-205); the top 20 main long positions were 88422 (+ 820), short position 133384 (-289), net short position 44962 (-1109).

On Mar 1, the main closing price of NR is 11950 (0) yuan/ton, the Thai standard rubber in Qingdao Free Trade Zone is 1845 (-20) US dollars/ton, the Malaysian standard rubber is 1795 US dollars/ton (-30), and the Indonesian standard rubber is 1735 (-50) US dollars. /Ton. The main contract basis is -715 (-316) yuan/ton.

As of February 26: the total stock of the exchange is 174846 (+100), and the exchange warrant is 167940 (0).

Raw materials: sheet rubber 63.1 (-3.09), cup lump 44.3 (-1), latex 61.5 (-5), RSS3 66.01 (-3.38).

As of February 25, the domestic all-steel tire operating rate was 58.73% (+41.49%), and the domestic semi-steel tire operating rate was 54.66% (+34.80%).

Viewpoint: The price of rubber remained weak yesterday, mainly due to the weakening of the market atmosphere. In the context of the large difference between the futures price and the current price, there is a demand for correction of the futures price. Based on the fundamentals, the period of low global supply will continue into April-May, during which the overall supply increase is limited, while domestic demand is steadily recovering, and overseas vaccine-based listings will also slowly recover. The overall demand growth momentum will remain unchanged, and the mid-line supply and demand Still tight, it is recommended to maintain a long mindset. In the short term, we need to pay attention to the opening situation in the main domestic production areas starting in mid-March. Once the amount of latex released is sufficient, the current high futures price difference will increase the hedging pressure on the disk.

Strategy: Tend to long position, but be cautious.

Risks: a substantial increase in production, continued accumulation of inventory, and a substantial decrease in demand, etc.

Copper

Yesterday, LME copper closed at 9031 US dollars/ton, up by 31 US dollars/ton, an increase of 0.34% and lightened 6199 lots to 334,000 lots.

【Important Information】

1. The US February ISM Manufacturing Index was 60.8, which was expected to be 58.6, and the previous value was 58.7. Institutional comments on the US February ISM manufacturing PMI: Due to the accelerated increase in new orders, the US manufacturing activity increased to a three-year high in February. However, as the epidemic continues, factories continue to face the problem of rising raw material and other input costs. The strong demand for commodities such as electronic products and furniture has promoted the development of the manufacturing industry, but 23.2% of the labor force is working at home due to the epidemic. However, as more Americans are vaccinated and manufacturing activity slows from current levels, demand may revert to the service industry in the summer.

【Trading strategy】

1. The U.S. dollar index went up overnight, and LME Copper continued to pull back. After the recent continuous surge in copper prices, there may be callback pressure.

2. Arbitrage: The waves in Chile have eased recently. Calculating the 1-2 month shipping schedule, copper concentrate and imported copper will return to normal at the end of March and early April. The supply-side interference will gradually slow down, and Arbitrage trading is temporarily on the sidelines..

3. Options: hold the current position.

(For reference only)