Crude oil

Crude oil: gasoline and diesel cracking spreads fall

The recent weakening of gasoline and diesel gaps is worthy of attention. As the United States resumes production from the cold wave, the market is concerned about whether the U.S. refined oil market has turned from strong to weak. Since the beginning of this year, although refined oil inventories are slower than crude oil, the cost of RINS has risen. As well as the impact of the cold wave, the performance of refined oil, especially US gasoline, is strong. However, as the low start of US refineries rebounds, US gasoline production is expected to follow up. The previously opened European and American gasoline arbitrage window will be closed, and liquidity. In terms of the index, traffic congestion in the United States has recovered from 40% at the beginning of the year to 60%. It is currently stagnant. If the demand recovery fails to keep up with the supply growth, there may be a situation where the inventory will be accumulated again. In addition to the United States, the increase in diesel exports from China and India has also led to the recent weakness of the Asia-Pacific diesel market. Although the rebalancing of the crude oil market has accelerated, many structural issues facing the refined oil market still deserve continued attention.

Strategy: Bullish cautiously; Brent intertemporal positive set or unilateral multi-match

Risk: Iranian oil returns to the market ahead of schedule, and oil-producing countries substantially increase production

Iron Ore

Iron Ore:

The price of iron ore futures increased, the position on I2105 contract closed at ¥1060 per ton, the spread of Iron 5-9 contract is ¥139.

In terms of spot, the PB powder in Rizhao Port was ¥1,114 per ton, the discounted SSF price was ¥1170 per ton.

【Important News】

1. Mysteel: From March 8 to 14, China’s 45 ports reached 21.740 million tons, an increase of 330000 tons from the previous month; the six northern ports reached 11.307 million tons, an increase of 738,000 tons from the previous month. The total arrival volume of China's 26 ports was 20.633 million tons, a decrease of 191,000 tons from the previous month.

2. Mysteel: According to data from the National Bureau of Statistics, my country's average daily crude steel output in January-February 2021 was 2.966 million tons, the average daily output of pig iron in January-February was 2.453 million tons, and the average daily output of steel in January-February was 3.551 million tons.

【Trading strategy】

1. At present, the iron ore port inventory continues to accumulate, but the extent is reduced. In terms of weight, the coarse powder inventory remains high; at the shipping end last week, Rio Tinto iron ore shipments have been significantly reduced, and it is expected to return to normal later. So far this year, overall shipments have increased steadily. In terms of demand, Hebei has been greatly affected by air pollution control policies. Many steel mills have plans to reduce their production capacity and have strong implementation efforts. At the same time, the recent increase in maintenance of steel mills has been added. The output of molten iron decreased significantly, with an average daily molten iron output of 2.4060 million tons, a decrease of 44,200 tons per day from the previous month. In terms of port dredging, the dredging of ports increased slightly this week, but it is still at a low level in previous years. The demand for hot coils at the finished product end is relatively good, and the removal is expected, with the extent of thread accumulation gradually decreasing. Yesterday, although the emergency response to heavy pollution weather was lifted in Tangshan area, most of the long-process steel mill blast furnace equipment was still in a state of limited production. The production time has not yet been determined, and there are doubts about the increase or decrease in the production of molten iron in the later period. It is unilaterally recommended to hold the current position for the time being.

2. Arbitrage: long heat coil and short iron ore, iron ore 5/9 reverse arbitrage.

(For reference only)

PTA

PTA: Polyester production and sales continue to be sluggish, and PTA processing fees are compressed more than expected

Balance sheet outlook: 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 be slightly accumulated in March-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: raw materials fluctuated with each other, and futures prices remained volatile

On March 15th, the most active traded RU contract closed at 15,115 (-150) yuan/ton, the price of mixed rubber was 11,765 (+205) yuan/ton, the basis of most active traded contract was -265 yuan/ton (+100); the open interest of top 20 active traded long positions was 76,656 (+1501) lots and the short position was 117534 (+297), net short position was 40,878 (-1204).

On March 15th, the most active traded NR contract closed at 11,885 (-145) yuan/ton, the STR in Qingdao Free Trade Zone was 1,830 (0) US dollars/ton, the SMR was 1,795 (0) US dollars/ton, and the SIR was 1,715 (+5) US dollars/ton. The basis of most active traded contract was -736 (+205) yuan/ton.

As of Mar 12th, the total inventory of the exchange was 175,162 (+78) lots, and the warehouse receipts of exchange were 170,780 (+2680) lots.

Raw materials: sheet rubber 63 (-0.68), cup lump 46.55 (+0.65), latex 64.5 (+1), RSS3 66.6(-0.31).

As of Mar 4, the domestic all-steel tire operating rate was 76.85% (+1.73%), and the domestic semi-steel tire operating rate was 72.6% (+1.04%).

Opinion: The futures prices continued to fluctuate yesterday, and the prices of raw materials in Thailand's main producing areas were mixed. Among them, the price of cup lump was relatively strong. It is understood that Yunnan will be expected to gradually delivered this weekend, and Hainan will also begin delivery next week. The domestic phenological conditions are generally good. Starting this week, we will pay close attention to the situation in the main domestic production areas. The current rubber prices are conducive to the release of production. Under the current large non-standard price difference, the supply pressure brought by the domestic opening in late March, this uncertain factor or the price of rubber is still repeated. From a mid-line 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.

Strategy: Neutral

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

Copper

Copper

LME copper prices closed at $9116.5/ton, down by $16/ton, a decrease of 0.18% and decreased 5424 lots to 317,000 lots.

【Important News】

1. In February 2021, the SMM Copper Concentrate Index (monthly) reported US$40.12/ton, a decrease of US$5.88/ton from the previous month. On March 12, the SMM Imported Copper Concentrate Index (weekly) reported US$32.07/ton, a decrease of US$2.18/ton from last week. Following a series of emergencies in Peru and Chile in January and February this year, such as road blockages, epidemics, and waves, the copper concentrate market once again burst into community road blockages and truck strikes, which continued to suppress TC and market sentiment.

2. Bureau of Statistics: From January to February, the added value of industrial enterprises above designated size increased by 35.1% year-on-year, an increase of 16.9% year-on-year, and an average growth rate of 8.1% in two years; total retail sales of consumer goods was 6,973.7 billion yuan, an increase of 33.8% year-on-year; 1- In February, the national investment in fixed assets (excluding rural households) was 4,523.6 billion yuan, an increase of 35.0% year-on-year, and an increase of 3.5% year-on-year, with a two-year average growth rate of 1.7%. In February, the national urban survey unemployment rate was 5.5%. A decrease of 0.7 percentage points year-on-year.

【Trading strategy】

1. The US 1.9 trillion infrastructure stimulus policy has been implemented, coupled with supply-side interference, the spot TC has been continuously reduced. At present, there have been quotations of less than 30 US dollars/ton in the market, but the transaction has not yet been completed. Fluctuating within the range, pay attention to the previous highs.

2. Arbitrage: At present, copper consumption has not fully recovered, and high copper prices have also restrained some copper consumption. The supply of copper scrap is abundant. Copper is still in the warehouse stage, and the arbitrage market should temporarily hold the current position.

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

(For reference only)