Crude oil

Crude oil: Suez Canal suspended, oil prices rebounded sharply

Yesterday, the news of the suspension of the Suez Canal boosted the market. The Suez River is one of the main choke points for global tanker transportation. Its strategic position is second only to the Strait of Hormuz and the Strait of Malacca. The annual oil tanker throughput in 2020 is about 1.7 million barrels /Day, accounting for 4.4% of the total global trade volume. Although the suspension of the Suez River will not cause the interruption of crude oil transportation, because it can be transported through the Sumaid pipeline or choose to avoid the Suez Canal and choose to bypass the Cape of Good Hope in South Africa, but it means transportation Costs will increase. In recent years, cargoes transported from the North Sea and Russia to Asia through the Suez Canal have increased. Therefore, the suspension of the Suez Canal will result in a decline in arbitrage flows in the east and west regions, but the overall impact is limited. And from the current point of view, Suez The suspension of the canal will not last too long.

Strategy: Neutral, none

Risk: None

Iron Ore

Iron ore

The position on I2105 contract closed at ¥1074per ton, the spread of Iron 5-9 contract is 176 yuan.

In terms of spot, the PB powder in Rizhao Port was ¥1,100 per ton, the discounted SSF price was ¥1155 per ton.

【Important News】

1. Mysteel: Vale officially issued a document regarding the temporary suspension of passenger trains on the Carajás Railway this month. Vale informed that the suspension is for safety reasons and based on preventive monitoring. The company has made timely adjustments to the operation of freight trains. At present, freight trains are operating normally. The company does not expect the Carajás railway traffic volume to be affected this year.

2. Esteel: This week (20210318-20210324), the inventory of the six northern ports totaled 73.924 million tons, a month-on-month decrease of 781,000 tons. Among them, traded mines accounted for 73.71%, and non-traded mines accounted for 26.29%. The inventory of North Nine Ports totaled 81.346 million tons, a month-on-month decrease of 631,000 tons. Among them, traded mines accounted for 73.72%, and non-traded mines accounted for 26.28%.

【Trading Strategy】

1. At present, there increased 1.387 million tons to 130 million tons of iron ore in 45 ports. Among them, Australian mines continue to rise from low levels, while Brazilian mines slowly fall from high levels. In terms of varieties, pellets and fine powder are removed from the warehouse, and coarse powder continues. Keep the tired inventory, and the lump ore inventory has stopped falling and rebounded. In the near future, the arrivals to the port have maintained a normal level. The arrivals of the new phase have increased by 1.66 million to 23.4 million tons on a month-on-month basis; the output of molten iron has dropped by 86,000 tons to 2.32 million tons per day. Except for the Tangshan area, 7 blast furnaces are scheduled to resume production this week. The blast furnace is scheduled to be overhauled. If the status quo in Tangshan area is maintained, the output of molten iron may rebound. The steel mills are not actively replenishing their warehouses for the time being, worrying that environmental protection will strike again, and most of them adopt the method of picking and using. The demand for finished thread and hot coil is better, and the elimination is expected. On the whole, iron ore discounts and upward restoration momentum exist. The current production limit has reached expectations, and the market mentality has gradually stabilized. The market has rebounded after a sharp decline. Strategically, it is recommended to focus on more.

2. Arbitrage: 5/9 positive arbitrage

(For reference only)

PTA

PTA: PTA maintenance increased again in April

Balance sheet outlook: TA maintenance plans are concentrated in March-April, and for the first time, a small de-stocking is expected, and TA processing fees are expected to bottom out; however, PX will be slightly accumulated in March-April, and PX processing fees will consolidate.

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 outbound rate dropped, and the out-of-zone inventory rebounded slightly

On March 24th, the most active traded RU contract closed at 14,345 (-145) yuan/ton, the price of mixed rubber was 12,800 (-50) yuan/ton, the basis of most active traded contract was -520 yuan/ton (+70); the open interest of top 20 active traded long positions was 67780 (-1237) lots and the short position was 95050(-4666), net short position was 27,270(-3429).

On March 24th, the most active traded NR contract closed at 11,550 (-140) yuan/ton, the STR in Qingdao Free Trade Zone was 1,815 (-5) US dollars/ton, the SMR was 1,785 (0) US dollars/ton, and the SIR was 1,705 (0) US dollars/ton. The basis of most active traded contract was -429 (+173) yuan/ton.

As of Mar 19th, the total inventory of the exchange was 175,002 (-160) lots, and the warehouse receipts of exchange were 170,620 (-160) lots.

Raw materials: sheet rubber 61.9 (-0.4), cup lump 46 (-0.55), latex 64 (0), RSS3 64.79(-0.68).

As of Mar 18, the domestic all-steel tire operating rate was 77.69% (+0.84%), and the domestic semi-steel tire operating rate was 73.01% (+0.41%).

Opinion: The price of futures remained weak yesterday. Driven by the continued decline overnight, the price of rubber dropped rapidly at the opening and then rebounded. The overall trend is still weak. The latest data shows that due to the decrease in the delivery of goods by downstream factories, the rate of outbound warehouses in the Qingdao port area has decreased, and the out-of-area inventory has rebounded slightly, but the total port inventory has maintained a slight decline. The current tire plant operating rate is relatively high, but domestic replacement demand has weakened, and export orders are still good. It is expected that the high operating rate can be maintained until May. Domestic delivery is approaching, and product demand performance is average. Shanghai Rubber's supply and demand weakened month-on-month, and it is more affected by dark-colored tape. It is expected that the dark-colored glue has not yet ended, and there is limited room to fall under Shanghai Rubber. There is no obvious supply and demand drive, and short-term prices are expected to fluctuate in general or follow the macro atmosphere.

Strategy: Neutral

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

Copper

Copper

Yesterday, LME copper closed at US$8889/ton, up by US$18/ton, an increase of 0.2%, and increased 1219 lots to 315,000 lots.

【Important Information】

1. According to foreign media reports, at about 6 a.m. on March 23, the large container ship "EVER GIVEN" of Evergreen Shipping ran aground shortly after entering the Suez Canal, causing traffic jams in both directions of the Suez Canal. On the evening of March 24, foreign media reported that Ahmed Mekawy, deputy general manager of the port agency service provider GAC in charge of Suez Canal affairs, said that the current towing vessel has made some progress, and it is expected that the vessel will resurface soon. The blockage of the Suez Canal may be partially relieved today and tomorrow.

2. Fed Chairman Powell said that the job market has made very desirable progress. He once again downplayed the impact of rising yields, saying that this reflects a better economic outlook and increased market confidence. The President of the New York Fed stated that high unemployment will keep inflation at a low level. The president of the Atlanta Fed expects to enter the interest rate hike channel in 2023.

【Trading Strategy】

1. The external market risks have increased recently. The market has moved from not believing in inflation to fully believing in inflation, until now the market has expectations of interest rate hikes in the United States. Stocks and non-ferrous metals make adjustments. The current expectation of monetary tightening exists, but the reality of easing remains unchanged. In addition, before the peak consumption season, the current inventory is still at a relatively low level and the downstream inventory is also low. We believe that the copper price will continue to adjust in the original shock range in the near future, but it has not yet come to the time to turn.

2. Arbitrage: At present, copper consumption has not fully recovered. Real estate, infrastructure and other orders are relatively weak. High copper prices have also restrained some copper consumption. The supply of copper scrap is abundant. The downstream favors copper scrap is relatively strong. Copper is still in storage. At this stage, the arbitrage tray is temporarily to hold the current position.

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

(For reference only)