Iron ore: Market expectations and reality have weakened simultaneously, and futures and spot prices have generally fallen.
Last week, iron ore futures fluctuated downwards. As of the close of last Friday, the iron ore 01 contract closed at 895 yuan/ton, a week-on-week drop of 27 yuan/ton, or 2.93%. In terms of spot, the PB fines at Qingdao Port reported 1,242 yuan/ton last Friday, down 94 yuan/ton from the previous week. SSF reported 863 yuan/ton, down 69 yuan/ton, and Platts 62% index reported 171.2 US dollars/ton, down 9.3 US dollars/ton. In terms of transactions, the average daily transaction of iron ore at main ports last week was 1.13 million tons, an increase of 240,000 tons from the previous week. Both futures and spot prices fell to varying degrees, and transactions rebounded slightly.
In terms of supply, according to Mysteel statistics, the total shipment of iron ore from Australia and Brazil was 24.724 million tons, a decrease of 147,000 tons from the previous week; the total shipment from Australia was 16.908 million tons, a decrease of 490,000 tons from the previous week. Among them, Australia's shipment to China was 13.401 million tons, a decrease of 1.458 million tons from the previous week; Brazil's total shipment was 7.816 million tons, an increase of 343,000 tons from the previous week. The total global shipping volume was 31.257 million tons, a decrease of 1.234 million tons from the previous week; the total arrival of China’s 45 ports was 22.166 million tons, an increase of 5.943 million tons. The total arrival volume of the six northern ports was 11.455 million tons, an increase of 1.724 million tons from the previous week. Global shipments dropped slightly on a week-on-week basis. The overall performance of external mines on the supply side was stable, while internal mines contracted slightly.
In terms of demand, Mysteel surveyed 247 steel mills with a blast furnace operating rate of 74.61%, an increase of 0.26% from last week and a year-on-year decrease of 16.8%; the blast furnace ironmaking capacity utilization rate was 85.73%, a week-on-week decrease of 1.11%, and a year-on-year decrease of 9.03%; the profit rate of steel mills was 87.88%, a week-on-week increase of 1.73%, and a year-on-year decrease of 7.36%; the average daily molten iron output was 2.2819 million tons, a week-on-week decrease of 29,500 tons, and a year-on-year decrease of 240,300 tons. Mysteel surveyed 163 steel mills with a blast furnace operating rate of 57.18%, an increase of 0.14% week-on-week; the capacity utilization rate was 69.27%, an increase of 0.11% week-on-week; the utilization rate excluding the eliminated capacity was 75.4%, down 11.71% from the same period last year; the profit rate of steel mills was 77.3%, down 0.61% week-on-week; the average daily port congestion volume increased by 355,500 tons to 2.8437 million tons. The operating rate of blast furnaces increased slightly on a week-on-week basis, the average daily molten iron continued to decline, and the demand for iron ore continued to weaken.
In terms of inventory, Mysteel counted that the imported iron ore inventory of 45 ports across China was 12.6393 million tons, a week-on-week drop of 1.7412 million tons; the average daily port congestion volume increased by 355,500 tons to 2.8437 million tons. Among which, Australian ore 6392.7 dropped 201.61, Brazil ore 3457.34 increased 76.63, trade ore 7006.2 increased 15.6, pellets 384.08 decreased 2.12, iron ore concentrates 940.17 decreased 35.39, lump ore 1912.64 decreased 105.6, coarse iron powder 9402.41 decreased 31.01. The number of ships in the port was 192, an increase of 24. The port inventory is at the historical median level, and there is still room for further optimization of the variety structure.
On the whole, the supply side of the external ore remained stable while the internal ore contracted, the domestic consumption side was significantly weaker as a result of the impact of the crude steel production restriction and the epidemic, 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. 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: tend to be bearish in the mid-term
Cross-species: initiate a long position of the nearby futures contract of thread and hot-rolled coil and a short position of the distant futures contract of iron ore
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: Demand rebounded on a week-on-week basis, and rubber prices continued to rebound.
Last week, rubber futures prices continued to rebound. With the continued rebound in overseas Thai raw material prices, the support of the lower limit of rubber prices is strong. At the same time, after domestic demand is close to a low point, there is an expectation of a rebound in the later period. Coupled with the continued decline in domestic port inventory, the overall supply and demand may improve month-on-month. The total inventory of domestic exchanges as of August 6 was 201,150 tons (+4400), and the amount of futures warehouse receipts was 181,810 tons (+3900). With the rebound of domestic raw materials and the rise in market prices, warehouse receipts continued to rise last week. As of August 1, due to limited arrivals, inventory in Qingdao Free Trade Zone continued to fall slightly, and the absolute amount was also at a low level in recent years compared to the same period last year.
In terms of downstream tire operating rate, as of August 5, the operating rate of all-steel tire companies was 62.68% (+1.56%), and the operating rate of semi-steel tire companies was 59.42 (+2.09%). In the off-season of demand, the tire factory's operating rate is still insufficient to recover. Last week, the operating rate rebounded due to the production of some snow tires. In terms of seasonality, in late August, the operating rate is expected to usher in a seasonal improvement.
Opinion: The recent upward logic of the rubber market mainly comes from the repair of the previous decline. On the one hand, after the price of raw materials in overseas Thai production areas plummeted, the price of latex rebounded again to repair the spread between it and cup lump. On the other hand, after the domestic downstream tire factory's operating rate fell, the low operating rate rebounded due to the rebound in overseas snow tire production orders. At the same time, the later period will also usher in the seasonal peak consumption season, and the operating rate is expected to rebound further, which will bring about an improvement in rubber supply and demand. After the current price correction, pay more attention to the upward pressure in the later period. RU mainly focuses on the arbitrage window for RSS3. Calculated from the price of RSS3 last weekend, the price of 13,850 yuan/ton is already facing import pressure. If the price of raw materials cannot rise sharply in the later period, it will limit the upward space of the rubber price market. In addition, RU needs to pay attention to the market's delivery profit. Once profits continue to expand, it will attract the intervention of hedging orders. At present, the RU non-standard spread has not significantly widened, and it is expected that the rubber price will continue to fluctuate strongly next week.
Strategy: Cautiously bullish
Risk points: Domestic supply may increase substantially, demand will continue to weaken due to the epidemic and other impacts, and funds may be tight.
Crude oil: The epidemic and tight import quotas are negative for oil prices in the short term.
The recent negative factors affecting the oil market mainly come from two aspects. The first is the spread of the Delta epidemic, especially the outbreak of domestic epidemics in many places. Some cities in East China, such as Nanjing and Yangzhou, have suspended public transportation, such as airplanes, 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. From the perspective of traffic congestion index, such as the hot spots of the epidemic, the congestion index of Nanjing and Yangzhou dropped by more than 50%. However, whether this has such a significant impact on demand mainly depends 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. However, if the epidemic continues to spread and the number of new infections remains high, it will suppress the demand for the "Golden September, Silver October" travel peak seasons in the future. However, we believe that the epidemic can be controlled in a relatively short period of time and there will be no large-scale spread.
The second is China's current oil import and export 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" 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 be the most affected. 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, if the Ministry of Commerce issues temporary quotas to the two large private refineries, plus the recent signing of a crude oil import commitment letter between Shandong Refinery and the government, it is expected that the third batch of import quotas in September may be appropriately relaxed. However, we expect the overall quantity of refined oil quotas to be significantly tightened compared to previous years. In the second half of the year, the pressure of supply and demand in the domestic refined oil market is still relatively high, which restricts the start of domestic refineries and the demand for crude oil imports.
Copper: The US dollar is strong but copper prices are relatively defensive.
According to SMM, the average price of SMM 1# Copper Cathode in the week of August 6 was between 69,670 yuan/ton and 71,725 yuan/ton, and the average premium and discount price of Standard-Grade Copper was between 115 yuan/ton and 360 yuan/ton. Last week, copper prices basically maintained a volatile pattern, and premiums and discounts remained high. And when the price fell, the premium and discount quotations rose relatively significantly.
Last week, Fed officials released a hawkish attitude, and the better-than-expected non-agricultural data intensified market concerns that the Fed might reduce the scale of bond purchases in advance, making the U.S. dollar stronger on Friday. However, in this process, copper prices are relatively defensive compared to precious metals. And when prices fall in the middle of the week, market premiums and discounts are also quite high. As far as the current inventory situation is concerned, it seems that the situation in China has just begun to show an accumulation in inventory. Therefore, in general, the current fundamental factors have a relatively neutral effect on prices, so prices may also be dominated by shocks in the near future.
On the macro level, the global central bank will continue to maintain the current ultra-loose monetary and fiscal policies in the short term. After the Fed's meeting on interest rates in July, despite the fall in the U.S. dollar, the Fed still did not start to reduce the size of its current bond purchases. In terms of fundamentals, the current TC price continues to rise, coupled with the domestic implementation of reserve release, 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. Therefore, in general, we recommend that investors maintain a relatively neutral attitude.
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: Yisheng's August contract supply has reduced again; investors can pay attention to the follow-up Zhejiang Petrochemical crude oil quota issue.
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 Asian PX August balance sheet went flat.
(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：谨慎看多 2. 跨市：暂缓 3. 跨期：暂缓；4. 期权：暂缓