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Daily morning for Crude oil, PTA, natural rubber, iron ore, copper Iro (ZH & EN) 20210811

Fang submitted 2021-08-11 09:56:12

Iron ore: The iron ore market sentiment was weak, and we still maintain the suggestion of initiating a short position of iron ore when the market price hits high.

Viewpoint and logic:

Yesterday, the iron ore market was weak, and imported ores fell 5-26 throughout the day. At present, Qingdao Port PB fines reported 1169 fell 21, Yangdi Fines 1003 fell 20; Caofeidian PB fines 1167 fell 20, SSF 820 fell 15; Tianjin Port PB fines 1170 fell 25, JMBF 1065 fell 20; Jiangyin Port fines 1220 fell 26. The prices of domestic ores fell in some areas. Among them, the price of Tangshan iron ore concentrates fell by 120 yuan/ton; the price of Qianxi iron ore concentrates fell by 128 yuan/ton; the price of Qian'an iron ore concentrates fell by 135 yuan/ton.

According to customs statistics, China imported 88.506 million tons of iron ore and its refined fines in July, a month-on-month drop of 911,000 tons and a year-on-year drop of 24.141 million tons. From January to July, China imported a total of 649.025 million tons of iron ore and its refined fines, a year-on-year decrease of 9.909 million tons.

On the whole, with the in-depth advancement of production restrictions, which generates a big negative factor to iron ore. In the past month, the index, premium, etc. have all shown a sharp decline, and port inventories have gradually accumulated. We still maintain the suggestion of initiating a short position of iron ore when the market price hits high. However, it should be noted that the current low sintering inventory of steel mills and the continued expansion of the basis have brought a slight rebound in the market.

Strategy: None

Unilateral: cautiously bearish

Cross-species: initiate a long position of thread and hot-rolled coil and a short position of iron ore

Inter-period: None

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 to decline.

On August 10, the most-active RU contract closed at 14,910 (+75) yuan/ton, the price of mixed rubber reported 12,475 (+50) yuan/ton, and the basis of most-active contract stood at -1610 yuan/ton (-75); the open interest of top 20 actively traded long positions was 84,587 (+7,514) lots, ,the short position was 115,569 (+9,686) lots, and the net short position was 30,982 (+2,172) lots.

On August 10, the most-active NR contract closed at 11,470 (+85) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,765 (+5) US dollars/ton, the SMR stood at 1,745 (+5) US dollars/ton, and the SIR figure was 1,725 (0) US dollars/ton. The basis of most-active contract reported -285 (+85) yuan/ton.

As of August 6: the total inventory of domestic exchanges was 201,150 (+4,400) tons, and the amount of warehouse receipts of exchanges was 181,810 (+3,900) tons.

Raw materials: Sheet rubber 52 (-0.1), cup lump 47.45 (+0.25), latex 50 (+0.5), RSS3 55.55 (+0.3).

As of August 5, the operating rate of domestic all-steel tire factories was 62.68% (+1.56%), and the operating rate of semi-steel tire factories was 59.42 (+2.09%).

Opinion: Yesterday, rubber futures prices continued to be strong, and domestic port inventories as of last weekend continued to decline. The price of raw materials in Thailand presented a mix of gains and losses, but the prices of latex and RSS3 still rose slightly. The current demand performance is weak, but its month-on-month ratio is improving. Moreover, the rebound in raw material prices and the continued decline in domestic port inventories have made the rubber support stronger. At the same time, expectations of a slowdown in domestic imports due to the Southeast Asian epidemic are strengthening, and support on the supply side in the future may be gradually strengthened. Before the spread between futures and spot prices is not significantly widened, the price of rubber is expected to remain strong and volatile.

Strategy: Cautiously bullish

Risks: production may increase substantially, inventory may continue to accumulate, and demand may decrease substantially, etc.

Crude oil: API inventories fell and oil prices rebounded sharply.

Oil prices rose sharply yesterday, and volatility remained high. Generally speaking, despite the recent negative factors in China's demand (the outbreak of the epidemic, the contraction of refined oil export quotas and crude oil import quotas), Western demand is still performing well, and the US gasoline crack spread has reached a new high during the year. From the API inventory data, crude oil and refined oil inventories maintained a downward trend. However, the current fundamentals are less likely to turn, and the current market structure is the strengthening of the previous pattern of strong west and weak east. However, if the epidemic is controlled and the crude oil quota is issued, we believe that the phased weakness of the spot market may be improved.

Strategy: neutral

Risk: None

Copper: Copper prices continue to fluctuate higher despite the continued recovery of the US dollar.

Spot: According to SMM, the overall trading activity in the spot market was still not high yesterday. In the morning market, Standard-Grade Copper initially reported a premium of 150-160 yuan/ton, but no one in the market paid any attention. The transaction only improved slightly when some holders adjusted their quotations slightly lower to 140 yuan/ton due to the demand for spot exchange. After the second trading session, when a very small amount of goods with a premium of 130 yuan/ton flowed into the market and was bought out, the premium and discount returned to a premium of 140-150 yuan/ton. It was difficult to see the spread between High-Grade Copper and Standard-Grade Copper, and the overall quotation of High-Grade Copper was a premium of 150-170 yuan/ton. Guixi Copper also only reported a premium of 170 yuan/ton, but there was little buying interest in the market, and the actual transaction was insipid. The Hydro-Copper quotation highlights the differences. Some brands such as BMK reported a premium of 60-70 yuan/ton and got a small amount of transactions, while Some better brands such as UMMC and ESOX reported a premium of 90-100 yuan/ton to lead the market, but the overall transaction was still relatively insipid.

Opinion: In recent days, a series of strong US employment data has consolidated expectations that the Fed may soon begin to scale back large-scale anti-epidemic stimulus measures. Many Fed officials said that the level of inflation has reached the threshold that prompted the Fed to raise interest rates. This has allowed the US dollar to maintain a strong momentum, but as stated in the previous report, the non-ferrous metals sector has shown relatively defensive under the strength of the US dollar, showing that the non-ferrous metals sector may be more favored by the market when the economic recovery is expected. Therefore, for copper investment, it is still recommended to adopt the strategy to purchase at low prices.

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, the cross-species arbitrage strategy is dominated by long allocation.

1. Unilateral: cautiously bullish

2. Inter-market: postpone

3. Inter-period: postpone

4. Options: postpone

Focus point:

1. The Fed's monetary policy orientation

2. The trend of the US dollar index

3. Policy risks may increase.

PTA: In the context of continued destocking expectations, PTA processing fees continue to be firm.

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.

Strategic recommendations:

(1) Unilateral: Cautiously bullish, and to initiate long positions when processing fees witness a contraction.

(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 load situation of Zhejiang Petrochemical PX; the extent of load reduction under the low profit of polyester.

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