Iron ore: Demand continues to weaken, and prices fluctuate downward.
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 1,007 yuan/ton, down 50.5 yuan/ton, or 4.78%. Both the open interest and trading volume of the most-active iron ore 2201 contracts rose sharply, and its price experienced a decline, closing at 888.5 yuan/ton, down 44 yuan/ton, or 4.72%. Qingdao Port PB fines reported 1,212 yuan/ton, down 50 yuan/ton, SSF reported 825 yuan/ton, down 63 yuan/ton, and the spread between high and low-grade products was 387 yuan/ton. A total of 830,000 tons were traded at the port yesterday.
According to the latest data from the China Iron and Steel Association, in late July, the average daily pig iron output of key steel enterprises was 2.3937 million tons, a decrease of 1.07% from the previous week. According to the statistics of the Iron and Steel Association, the total output of the five major building materials commonly used in construction this week was 10.072 million tons, an increase of 3,600 tons from the previous week. The supervisory authority of Chongqing stated to focus on monitoring the prices of iron ore, steel, coal, etc., and to investigate and punish illegal activities such as price bidding and monopoly in accordance with the law.
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. The current market returns to the trading logic of restricting crude steel production. 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)s
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: Raw material prices continued to rebound, and cost support remained.
On August 5, the most-active RU contract closed at 13,385 (-120) yuan/ton, the price of mixed rubber reported 12,275 (0) yuan/ton, and the basis of most-active contract stood at -235 yuan/ton (+120); the open interest of top 20 actively traded long positions was 49,668 (-3,537) lots, ,the short position was 76,246 (-4,096) lots, and the net short position was 26,578 (-559) lots.
On August 5, the most-active NR contract closed at 11,130 (-135) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,725 (0) US dollars/ton, the SMR stood at 1,715 (0) US dollars/ton, and the SIR figure was 1,695 (+40) US dollars/ton. The basis of most-active contract reported -165 (+400) 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 50.4 (+0.2), cup lump 45.75 (+0.2), latex 47 (+0.5), RSS3 53.62 (+0.43).
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: The price of rubber futures weakened somewhat yesterday, and the overall price this week showed a volatile pattern. The small spread of the domestic epidemic has increased concerns about demand and the decline in crude oil prices, resulting in a weak market sentiment. However, the fundamentals of rubber itself have improved in the short term, which has supported the price. Yesterday, the price of raw materials in Thailand continued to rebound slightly, and the spread between latex and cup lump was further eased. The current demand is weak, but the stabilization of raw material prices and the continued decline in domestic port inventories have still supported rubber prices, and it is expected that there is limited room for adjustment.
Strategy: Cautiously bullish
Risks: production may increase substantially, inventory may continue to accumulate, and demand may decrease substantially, etc.
Crude oil: Lacey was elected President of Iran, and there is still no specific timetable for the return of Iranian oil.
The recent negative factors affecting the oil market mainly come from two aspects. One is the spread of the epidemic, especially the multiple outbreaks in China. Some cities in East China, such as Nanjing and Yangzhou, have suspended some public transportation, for example buses and taxis, which will have a negative impact on China's oil consumption in the short term. And because East China is the region with the largest consumption of refined oil in China, some institutions have predicted that China's consumption will drop by about 10% month-on-month in August. However, whether there will be such a significant impact on demand depends mainly on whether the domestic epidemic can be controlled quickly. If it is similar to the situation of the previous South China epidemic, then the suppression of demand may only be an impulsive effect.
The second is China's current quota policy. Taking into account factors such as carbon neutrality, taxation and market fairness, China has tightened crude oil import quotas and refined oil export quotas this year, and the "big import and big export volume" model of oil import and export will be more inclined to internal circulation. But as a result, the internal competition among domestic refineries has intensified, and private refineries will bear the brunt. At present, the operating rate of independent refineries in Shandong has dropped by nearly 10% compared to a month ago. Zhejiang Petrochemical has also recently reduced its installation load due to lack of import quotas, and recently applied for temporary quotas to the Ministry of Commerce together with Sheng Hong Company. The current quota issue has become the biggest bottleneck restricting China's crude oil procurement. However, we believe that there are doubts about the continuity of the negative factors in these two aspects. If the domestic epidemic is quickly controlled and the Ministry of Commerce issues temporary quotas sooner, the market's negative sentiment will be significantly eased.
Copper: The market awaits non-agricultural data, and copper prices maintain a volatile pattern.
Spot: According to SMM news, today's quotations are still showing a declining trend, and High-Grade Copper and Standard-Grade Copper continue to maintain a pattern of almost no price difference. At the beginning of the morning session, Standard-Grade Copperand High-Grade Copper consistently quoted at a premium of around 150 yuan/ton. Not long afterwards, -P and ENM took the lead in quoting a premium of 130-140 yuan/ton, which forced the price of Standard-Grade Copper to be reduced to a premium of 120 yuan/ton. After 10 o'clock, the stampede quotation continues. The quotation of Standard-Grade Copper has reached a premium of 100-110 yuan/ton, and the price of High-Grade Copper following its trend to quote at a premium of 120-130 yuan/ton. During the first trading period, the market only heard the quotations but had little intention to trade. The supply and demand sides remained deadlocked until the second trading period. After that, some holders tried to break the 100-yuan premium to attract buyers' attention, which eventually attracted bargain hunters, and the 100-yuan premium was able to be held. The spot price in late afternoon trading remained stable at a premium of 120 yuan/ton. Due to the impact of the epidemic on logistics, the performance of Hydro-Copper and Low-Quality Copperwas poor. Their quotations have dropped from around 80 yuan/ton in the morning session to around 50 yuan/ton in the afternoon session. Although the market price has fallen by around 500 yuan/ton, downstream buying still remains stagnant, especially the entry of downstream companies in the Jiangsu area has been significantly hindered.
Opinion: Yesterday US Treasury yields continued to show a rebound pattern, but the US dollar index showed limited changes. The continued strength of US stocks has boosted market risk sentiment to a certain extent, while copper prices have gradually stabilized in the process. However, as far as the fundamentals are concerned, the continued rise in TC prices has put pressure on copper prices from the supply side. However, the current inventory is still destocked, so under such circumstances, it is expected that copper prices will continue to fluctuate. Investors can pay attention to the results of the evening non-agricultural data.
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: Crude oil drives down the cost, investors can pay attention to the crude oil quota of Zhejiang Petrochemical.
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: take a wait-and-see attitude, and wait for the callback of the processing fee..
(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.
铜： 市场静候非农数据 铜价维持震荡格局
1. 单边：中性 2. 跨市：暂缓 3. 跨期：暂缓；4. 期权：暂缓
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