Iron ore: the expectation of production restriction has switched, and ore prices fluctuate weakly.
Opinion and logic: Yesterday, the open interest of iron ore 2109 contract shrank, while the trading volume witnessed a rise, and its price closed at 1,067 yuan/ton, up 5.5 yuan/ton, or 0.52%. Both the open interest and trading volume of the most-active iron ore 2201 contracts rose sharply, and its price closed at 941 yuan/ton, down 6.5 yuan/ton, or 0.69%. Qingdao Port PB fines reported 1,262 yuan/ton, down 3 yuan/ton, SSF reported 888 yuan/ton, and the spread between high and low-grade products was 374 yuan/ton. A total of 860,000 tons were traded at the port yesterday.
Tangshan issued follow-up measures to reduce ozone pollution. From 22:00 on August 3 to 10:00 on August 10, nearly 20 steel mills sintering machines stopped production, ranging from 1-4 sets. Eight steel companies in the Heyuan area of Guangdong will shut down their production from 6:00 on August 4 to 2:00 on August 12, which is expected to affect the daily output of about 10,000 tons.
On the whole, the supply side of the external ore remained stable while the internal ore contracted, the domestic consumption side was significantly weaker, the inventory was at the median level over the years, and there was a certain inventory accumulation of expectations, which led to the reversal of the iron ore supply and demand structure. Affected by the market's different perceptions of crude steel production restriction, ore prices maintain a volatile pattern in the short term. According to surveys at this stage, the country-wide crude steel production restriction is still in progress in an orderly manner, and the supervisory authority is firm on the decision to implement the crude steel production restriction. Under strict production restrictions, excessively high ore prices will be difficult to maintain, and there is a high probability of weak operation in the future.
Unilateral: cautiously bearish
Cross-species: initiate a long position of coke and a short position of iron ore (01 contract); initiate a long position of thread and hot-rolled coil (10 contract) and a short position of iron ore (01 contract)
Spot-Futures Arbitrage: None
Options: buying a put option
Concerns and risks:
1. The intensity of production restriction and the policy orientation at the thread and hot-rolled coil end may fall short of expectation;
2. The off-season demand performance of the thread and hot-rolled coil end is not as good as expected;
3. Shipping data may change drastically;
4. The epidemic may aggravate and so on.
Rubber: Port inventory continued its downward trend.
On August 4, the most-active RU contract closed at 13,505 (+180) yuan/ton, the price of mixed rubber reported 12,225 (+100) yuan/ton, and the basis of most-active contract stood at -355 yuan/ton (-180); the open interest of top 20 actively traded long positions was 53,205 (-2,469) lots, ,the short position was 80,042 (-3,671) lots, and the net short position was 27,137 (-1,202) lots.
On August 4, the most-active NR contract closed at 11,265 (+265) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,725 (+10) US dollars/ton, the SMR stood at 1,715 (+10) US dollars/ton, and the SIR figure was 1,655 (+5) US dollars/ton. The basis of most-active contract reported -565 (-225) yuan/ton.
As of Jul 23: the total inventory of domestic exchanges was 196,750 (+2,864) tons, and the amount of warehouse receipts of exchanges was 177,910 (+640) tons.
Raw materials: Sheet rubber 50.20 (+0.15), cup lump 45.55 (-0.25), latex 46.5 (+0.50), RSS3 53.19 (+0.31).
As of Jul 29, the operating rate of domestic all-steel tire factories was 61.12% (-1.63%), and the operating rate of semi-steel tire factories was 57.33 (-1.32%).
Opinion: Yesterday, rubber futures prices remained strong and volatile, and the spread between RU futures and spot prices widened. The price of raw materials in Thailand continued to rebound slightly, and the spread between latex and cup lump was eased to a certain extent. At present, due to the seasonal off-season in the market, domestic downstream tire factories maintain a short-term operating rate at a low level. After the off-season in August has passed, the operating rate will usher in a rebound, and there is limited room for continued decline. Therefore, the current focus may be on the supply side. Affected by the epidemic, we have seen fewer domestic arrivals, which is reflected in the continued decline in port inventory. As of last weekend, domestic port inventories continued to decline, coupled with the stabilization of raw material prices, rubber prices are under strong support. Supported by the warmer market sentiment, rubber prices are expected to continue to fluctuate strongly.
Strategy: Cautiously bullish
Risks: production may increase substantially, inventory may continue to accumulate, and demand may decrease substantially, etc.
Crude oil: EIA crude oil inventories have increased more than expected, but the data is not completely negative.
Yesterday's EIA crude oil inventory data increased more than expected, and the expected difference reached nearly 6 million barrels, which deviated from API inventory. From the perspective of the driving factors behind, the main reason is that US crude oil exports have fallen sharply, with a week-on-week decline of nearly 600,000 barrels per day. But on the other hand, gasoline inventories have fallen by more than 5 million barrels per day, and terminal consumption is still strong. Therefore, the EIA data is not completely unilaterally negative, but it has aggravated the current market pessimism. The main negative factor for the recent oil price adjustment is still the continued deterioration of the Delta epidemic (especially in China). In addition, China's delay in issuing the third batch of import quotas has led to a shortage of quotas in some domestic refineries, and the market's concerns about China's relevant policies are also increasing.
Copper: The US dollar strengthened, and copper prices continued to fluctuate downward.
Spot: According to SMM, the spot market once again showed a stumbling downward trend yesterday. Due to the continuous inflow of imported copper and the rising proportion of outflows from CCC-P, ENM, and Peruvian, shipments for exchange of spot still become the mainstream of the market. At the beginning of the morning session, Standard-Grade Copper initially reported at a premium of 240-250 yuan/ton, but no one cared about the price in the market. Subsequently, the holders of Peruvian, ENM and other brands started the trend of leading the market to reduce prices, and directly quoted a premium of 220-230 yuan/ton, which forced the Standard-Grade Copper holders to adjust the price to less than 220 yuan/ton, but there are still hardly any buyers in the market. At the end of the first trading session, the quotations of Standard-Grade Copper and High-Grade Copper were almost the same at a premium of around 200 yuan/ton. After the second trading period, under the constant supply of goods, holders must have a price advantage in order to attract the attention of the market. Subsequently, the quotation of a premium of 200 yuan/ton was broken, and the price fell directly to a premium of 180-190 yuan/ton, which made the transaction slightly improved. High-Grade Copper maintained no spread with Standard-Grade Copperintraday. The continuous inflow of imported sources has led to the outflow of various brands of Hydro-Copper. Its quotations had fallen all the way, and there were hardly any signs of stopping the decline, decreasing from the highest UMMC quotation in the morning market of a premium of 170-180 yuan/ton the lowest price which below 100 yuan in the late afternoon session. Under the sentiment of buying up and not buying down, the downstream continued to hold a wait-and-see attitude, and there was no large-scale purchase behavior.
Opinion: After the Fed officials released hawkish comments yesterday, the U.S. dollar has risen, while crude oil prices have continued to fall. This is a relatively unfavorable factor for copper prices. Therefore, the price of copper has also fluctuated downward, but the decline is still limited. The fundamental changes are relatively limited. It is recommended to pay attention to the changes in the premium and discount quotations of the holders after the price declines. It is expected that the current overall copper price is still dominated by shocks.
1. Unilateral: neutral
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. Policy risks may increase.
PTA: Zhejiang Petrochemical reduced its load again, and PX supply pressure has decreased.
Balance sheet outlook: Under the background of the full implementation of the maintenance, the PTA August balance sheet experienced destocking again, the rapid inventory accumulation time node will be postponed to September, and there will be no pressure on inventory accumulation before delivery in September; the inventory accumulation rate of PX from July to August was limited.
(1) Unilateral: cautiously bullish
(2) Intertemporal: For the 9-1 spread, it is recommended to take a wait-and-see attitude for the time being.
Risks: PTA factory's control over the maintenance rhythm, the strength of replenishment of terminal speculation, and the progress of Zhejiang Petrochemical's new PX device into use.
1. 单边：中性 2. 跨市：暂缓 3. 跨期：暂缓；4. 期权：暂缓
1. 美联储货币政策导向 2.美元指数走势 3.政策风险加剧