Crude oil

Crude oil: API crude oil inventories increase, refined oil inventories decline

API announced yesterday’s inventory data. As a whole, the previous data trend continues, that is, affected by the cold wave, due to the sharp drop in refinery operating rates, crude oil inventories have increased sharply, and refined oil inventories have fallen, but the changes in the two are basically the same, resulting in total oil inventories. The change is small. Looking forward, as the refinery gradually resumes production, the overall data trend will return to normal. The next April to May will usher in the regular maintenance season for Canadian oil sands processing plants, which may affect the Canadian crude oil production of about 1 million barrels per day. Recently, with the announcement of the plant maintenance schedule, the discount of Canadian crude oil has also strengthened. Due to the reduction of Canadian imports and the resumption of refinery production, we expect that crude oil inventories in Cushing and the Midwest will fall again in the future.

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 substantially increases production

Iron Ore

Iron Ore:

The price of iron ore futures decreased, the position on I2105 contract closed at ¥1036 per ton, the spread of Iron 5-9 contract is ¥117.5.

In terms of spot, the PB powder in Rizhao Port was ¥1,179 per ton, the discounted SSF price was ¥1230 per ton.

【Important News】

1. Mysteel: As of March 9th, 51 out of 126 blast furnaces in Tangshan area have been overhauled (excluding long-term shutdowns). The total volume of overhauled blast furnaces is 42244m³; the weekly output is about 765,800 tons, and the capacity utilization rate is 72.56%, a decrease of 2.83% compared with last week, a decrease of 1.86% from the same period last month, and a decrease of 3.85% from the same period last year. From March 4th to 9th, a total of 15 blast furnaces were newly repaired in Tangshan area (including 7 blast furnaces withdrawn from last week), with a repair volume of 13,124m³, affecting about 40,400 tons of molten iron per day, accounting for about 40,400 tons of molten iron per day. Around 9.93%.

2. Mysteel: Tangshan industrial enterprises need to implement the production suspension and restriction measures in accordance with the first-level red warning response from March 9th to 11th. Some steel mills have stated that the current transportation has been strictly controlled, but the production has not been affected for the time being. According to Mysteel's theoretical calculations, if Tangshan D-level enterprises are 100% implemented in accordance with the first-level response, 17 blast furnaces will continue to be overhauled, and the daily average impact of molten iron output will increase by 49,900 tons.

【Trading strategy】

1. At present, the depot of iron ore port inventory is not as good as expected, and the inventory has continued to accumulate throughout the first quarter; there was a reduction in the shipments of Australia and Pakistan this week, and the reduction in Rio Tinto was significant because the two shipping ports of Rio Tinto were affected by the hurricane. The impact is greater, and shipments are expected to increase steadily in the later stage. On the demand side, Hebei is greatly affected by air pollution control policies. Many steel plants have production capacity reduction plans and have strong implementation efforts. At the same time, they are superimposed on the recent increase in steel plant maintenance. In the later stage, the output of molten iron is likely to show a downward trend. At present, the destocking of threaded hot coils is not as strong as expected. Under the expectation of "carbon peak" and "carbon neutral" in the mid-to-long term pig iron production reduction during the 14th Five-Year Plan period, demand will fall at any time, and iron ore will most likely be restocked. In the short term, pay attention to the implementation of the production restriction policy. Whether there are uncertain variables in the production of molten iron, it is recommended to hold the current position for the time being.

(For reference only)

2. Option: Sell I2105-c-1320 to close the position.

PTA

PTA: Crude oil drives PTA cost callbacks, PTA and PX processing fees have accelerated year-on-year decline.

Balance sheet outlook: TA maintenance plans are concentrated in March-April. For the first time, a small de-stocking is expected, and TA processing fees are expected to bottom; however, PX will be slightly accumulated from March to April, and PX processing fees have been compressed under the background of over-increasing in the previous period.

Strategic recommendations: (1) Unilateral: 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: The atmosphere weakened, and the price of rubber continued to fall

On March 9th, the most active traded RU contract closed at 15,020 (-140) yuan/ton, the price of mixed rubber was 11,765 (+205) yuan/ton, the basis of most active traded contract was -270 yuan/ton (-210); the open interest of top 20 active traded long positions was 79,189 (-2384) lots and the short position was 118022 (-8093), net short position was 38,833 (-5709).

On March 9th, the most active traded NR contract closed at 11,690 (-65) yuan/ton, the STR in Qingdao Free Trade Zone was 1,815 (-10) US dollars/ton, the SMR was 1,780 (-5) US dollars/ton, and the SIR was 1,705 (0) US dollars/ton. The basis of most active traded contract was -550 (+158) yuan/ton.

As of Mar 5, the total inventory of the exchange was 175,084 (+238) lots, and the warehouse receipts of exchange were 168,100 (+160) lots.

Raw materials: sheet rubber 61.95 (0), cup lump 44.7 (+0.4), latex 65 (+1.5), RSS3 66.6(+0.85).

As of Mar 4, the domestic all-steel tire operating rate was 75.12% (+16.39%), and the domestic semi-steel tire operating rate was 72.26% (+17.60%).

Viewpoint: The price of rubber continued to fall yesterday, mainly affected by the market atmosphere. The price was generally at 15,000 yuan/ton. The price performance was relatively defensive, perhaps mainly due to the support of raw materials. Yesterday, the price of raw materials in Thailand's main producing areas maintained a rebound momentum. The fundamentals of rubber have not changed much. In the short term, it is mainly concerned about the supply pressure brought by the domestic opening in late March under the current large non-standard price difference. From a mid-term perspective, the global low-yield period will continue to April and May, while domestic and overseas demand is showing a gradual recovery momentum, especially overseas, there is an expectation of demand recovery after the epidemic. The good supply and demand pattern may make the space under the rubber price limited, waiting for the price to stabilize.

Strategy: Neutral

Risks: a substantial increase in production, continued ac

Copper

Copper

LME copper prices closed at $8826/ton, down by $180.5/ton, a decrease of 2% and decreased 118 lots to 326,000 lots.

【Important Information】

1. The US House of Representatives plans to vote on the US$1.9 trillion bailout bill on Wednesday morning. After that, Biden will soon announce a longer-term and broader economic stimulus plan and is expected to face severe challenges in Congress. US Treasury Secretary Yellen said that the Treasury Department will release relief funds as soon as the stimulus bill is passed, and Biden may sign the bill this week.

2. 【The decline in global copper smelter activity index in February was mainly due to the decrease in smelting activities during the Chinese New Year】SAVANT monitoring data showed that global copper smelting activities continued to shrink in February after a sharp drop in January, mainly due to the decrease in smelting activities during the Chinese New Year. Smelting activities in countries other than China continued to pick up after last month. In February 2021, the global smelter activity index was 45.8, down from 46.5 in January. The China Index fell to 42.0 from 50.3 last month, as the suspension of production during the Chinese New Year severely affected activity levels. The activity level in North America in the first two months was extremely low. In February, it was 44.1 higher than January's 33.2, returning to normal. The European index rebounded to 43.0 from 41.3 in January. In other regions, Asia except China also showed significant improvement, with an index of 55.2 (48.8 in January), while South America rose from 43.0 in January to 50.3.

【Trading strategy】

1. The recent external market risks are relatively high. On the one hand, the yield of U.S. bonds has risen. On the other hand, the market has not responded positively to the 1.9 trillion stimulus policy, and domestic commodities and stocks have fallen. After LME Copper has just experienced a big rise, it may still maintain an adjustment state in the short term.

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 the arbitrage market will temporarily wait and see.

3. Options: sell put options, that is, sell CU2105-P-60000

(For reference only)