Iron ore: The policy is not yet clear, and the iron ore fluctuates upward.
Opinion and logic:
Yesterday, the iron ore fluctuated upward in the morning session, and the market showed a v-shaped trend during the afternoon hours affected by the news. The closing price of the iron ore 2109 contract was 1,173 yuan/ton, an increase of 34 yuan/ton, or 2.99%, from the closing price of the previous trading day, with open interest increasing 6,838 lots. In terms of spot, the spot market generally rose yesterday. The spot price of imported iron ore of ports increased by 5-23 yuan/ton throughout the day, the PB fines of Qingdao Port reported 1,483 yuan/ton, an increase of 18 yuan/ton, and the PB fines of Tianjin Port stood at 1,490 yuan/ton, an increase of 20 yuan/ton.
According to the National Development and Reform Commission, recently, the Price Department of the National Development and Reform Commission and the Price Supervision and Competition Bureau of the State Administration for Market Supervision sent a number of joint working groups to relevant provinces and cities to investigate the issue of maintaining supply and stabilizing prices for commodities. Recently, investigations into the iron ore spot market transactions and the supply and stability of commodities have strengthened the market’s expectations for policy regulation. However, the various departments are still only in the research stage, and the subsequent introduction of specific policies may take time.
On the whole, the low season of steel consumption and the implementation of local production restriction policies have led to more steel mills to stop production for maintenance. At the same time, the profit of long-process steel mills is already near the cost line, which has restrained iron ore prices. Therefore, domestic iron ore demand is expected to weaken. In addition, the overseas epidemic situation has improved, the economy has recovered, and various economic indicators have continued to improve, prompting overseas iron ore consumption to remain relatively strong. In the long term, the trend of iron ore prices is mainly affected by the production policy. If subsequent production restriction policies in various regions are implemented, iron ore demand will gradually weaken, and iron ore is likely to enter a state of surplus. However, before the production restriction policy is implemented, it is expected that the price of ore is still more likely to operate on the strong side. In short, there are more uncertainties on the policy side at present. We recommend that investors maintain a neutral wait-and-see attitude in the short term, and pay more attention to policy changes in the future.
Unilateral: hold a neutral wait-and-see attitude in the short term
Spot-Futures Arbitrage: None
Concerns and risks: the intensity and policy orientation of the production restriction at the thread and hot-rolled coil end, the off-season demand performance at the thread and hot-rolled coil end, and the worsening of the epidemic, etc.
Rubber: The price of raw materials stopped falling, and the price of rubber rebounded.
On June 23, the most-active RU contract closed at 12,935 (+265) yuan/ton, the price of mixed rubber reported 11,950 (+75) yuan/ton, and the basis of most-active contract stood at -335 yuan/ton (-15); the open interest of top 20 actively traded long positions was 117,803 (-3,074) lots, the short position was 161,711 (-6,732) lots, and the net short position was 43,908 (+3,658) lots.
On June 23, the most-active NR contract closed at 10,570 (+265) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,675 (+20) US dollars/ton, the SMR stood at 1,665 (+20) US dollars/ton, and the SIR figure was 1,620 (+15) US dollars/ton. The basis of most-active contract reported -61 (+98) yuan/ton.
As of June 11: the total inventory of domestic exchanges was 182,604 (+1,029) lots, and the amount of warehouse receipts of exchanges was 174,630 (-810) lots.
Raw materials: Sheet rubber 57.12 (+0.56), cup lump 42.55 (+0.25), latex 49.5 (0), RSS3 59.59 (+0.59).
As of June 11, the operating rate of domestic all-steel tire factories was 56.92% (-5.39%), and the operating rate of semi-steel tire factories was 52.75 (-5.91%).
Opinion: The departure of market shorts yesterday and the warmer macro environment brought about a rebound in rubber prices. The recent continuous decline in futures prices has narrowed the RU non-standard spread to less than 800 yuan/ton, and the arbitrage traders has left the market with a profit. From a fundamental point of view, the pattern remains weak. The main domestic production areas are ushering in the peak season for delivery, and the raw materials from Yunnan production areas are also being released. Based on the unsatisfactory price of the concentrated latex in the Hainan production area this year, part of the production capacity has returned to full latex, and the increase in standard products is expected to heat up. The weak demand performance is reflected in the slow decline in the operating rate of domestic tire factories. The continued decline in port inventory will bring about a continued decline in the spread between RU and NR. Although the absolute price is at a low level, due to the weak supply and demand drive, it is expected that the rubber price will continue to be weak, and the rebound space is limited.
Strategy: cautiously bearish
Risk points: production may increase sharply, inventory may continue to accumulate, and demand may fall sharply.
Crude oil: EIA inventories continue to be destocked, and oil prices are still strong.
Recently, the price of WTI Cushing has been exceptionally strong relative to other US oils. An important reason is that unexpected de-stocking efforts may cause Cushing's crude oil inventories to drop to 30 million barrels in the next few months. Another important reason may be the lack of blended raw materials for DSW crude oil (Cushing's delivery grade and spot flagship oil). The light sweet crude oil delivered locally by Cushing is a blend of light crude oil from a variety of different oil fields. Recently, the amount of WTI midland flowing into Cushing has been significantly reduced and some pipeline reversals have led to changes in the mix of raw materials in Cushing. This may also be the reason for the recent soft squeeze in Cushing. But from a historical point of view, when Cushing's inventory is nearing the bottom, a certain regional premium will be given to encourage the inflow of crude oil from other regions to increase, while the amount of crude oil flowing out of other regions will decrease. Therefore, it is very unlikely that Cushing's inventory is really close to the bottom of the tank.
Strategy: neutrally, tend to be bullish in the short term; go long positions of crude oil
Risk: The Iran nuclear agreement reaches quickly or a black swan event appears in the epidemic.
Copper: The peak season is coming to an end, and the price of copper is expected to remain dominated by shocks.
Spot: According to SMM news, as Shanghai copper stopped falling and rebounded for two consecutive days yesterday, the buying power of the market continued to weaken. In addition, there was a strong demand for spot exchange in the market during the first half of the year, and there was a large demand for selling futures in exchange for spot, leading to a rapid decline in premiums and discounts. Standard-Grade Copper began to report a premium of 30 yuan/ton in the morning session to test the market, but market inquiries were few. After that, the holders quickly launched the reduction measures, so that the quotations were quickly adjusted to decrease to the normal price level. Under the hope of no premium, the holders appeared collective bids in exchange for spot, and after 10 o'clock, the quotation stood at a discount of 20 yuan/ton. After the second period, a large amount of discounted goods flowed out, but it is still difficult to see a large amount of buying interest in the market. By the end of the trading session, the quotation had slipped to a discount of 40-50 yuan/ton, and the overall trading activity in the market was extremely weak. In the morning market, the High-Grade Copperprice reported a premium of 50 yuan/ton first and then quickly adjusted to 30 yuan/ton, but it is still difficult to see a deal. In the centralized quotation environment of the market, there is almost no spread between High-Grade Copper and Standard-Grade Copper. Although a source of High-Grade Copper with a discount of 20 yuan/ton was heard late in the market, there is still little interest for buying side. Due to the tight supply of Hydro-Copper, the price adjustment range is limited, and the overall price is quoted at a discount of around 60-50 yuan/ton. At the end of the afternoon market, there was an outflow of goods such as Bulgaria near a discount of 100 yuan.
Opinion: Yesterday, although copper prices continued the previous rebound pattern, from the perspective of market spot transactions, downstream buying was obviously not as prosperous as it was at the beginning of the week, and overall transactions were relatively weak. At present, the traditional peak season for downstream copper varieties is coming to an end. On the supply side, the price of TC continues to rise, coupled with the impact of the tapering, the supply side may have a relatively negative impact on prices. Therefore, it seems that the fundamentals' support for copper prices has weakened in the short term. However, there is still greater uncertainty in the macro aspect, so the current copper varieties may still be dominated by shocks for the time being.
In the medium and long term, macroeconomically, the global central banks will continue to maintain the current ultra-loose monetary and fiscal policies in the short term. Although the U.S. dollar has moved strongly after the interest rate meeting, it is largely an overdraft for future economic growth. In terms of fundamentals, the current TC price continues to rise, coupled with the domestic rumor of tapering, so the supply side has a relatively negative impact on copper prices. On the demand side, China’s current control of the epidemic is still very successful, and the new energy and new infrastructure sector will continue to drive copper demand. However, due to the current market interference from the rumors of the Federal Reserve tapering and the possible tightening of central bank liquidity around the world, in general, we recommend that investors maintain a relatively neutral attitude.
1. Unilateral: neutrally
2. Inter-market: postpone
3. Inter-period: postpone
4. Options: postpone
1. The Fed's monetary policy orientation
2. The trend of the US dollar index
3. Whether the demand in the second quarter can meet expectations
4. Policy risks may increase.
PTA: Crude oil costs have been pushed up, and TA processing fees have continued to rise.
Balance sheet outlook: Under the background of the implementation of TA overhaul, the accumulating rate in July is relatively controllable, and TA processing fees are still acceptable in the short term; the accumulation rate of PX inventory from June to July is limited, and it is expected that PX processing fee compression space is limited.
Strategic recommendations: (1) Unilateral: cautiously bullish (2) Intertemporal: under the circumstance that the price difference of 9-1 has rebounded sharply recently, waiting for reverse arbitrage opportunities.
Risks: The implementation of the PTA plant maintenance plan, the strength of the negative feedback of the maintenance of polyester filament, and the sustainability of the improvement in the supply and demand of aromatics due to the gasoline premium.
近期WTI Cushing价格相对其他美国油种异常强势，除了此前所说的超出预期的去库力度可能导致未来几个月内库欣原油库存下降至3000万桶以外，另外一个重要原因可能是缺乏DSW原油（库欣的交割牌号与现货旗舰油种）的调和原料，由于在库欣当地交割的轻质低硫原油是由多种不同油田的轻质原油调和而成，而近期WTI midland流入库欣的量明显减少以及部分管道逆转导致库欣当地的调和原料配比发生变化，这也可能是导致近期库欣当地出现软挤仓的原因，但从历史来看，在库欣库存接近底部之时，给出一定地区溢价后激励其他地区原油流入增加，同时流出其他地区原油数量减少，因此库欣库存真正接近罐底的可能性微乎其微。
1. 单边：中性 2. 跨市：暂缓 3. 跨期：暂缓；4. 期权：暂缓
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