Iron ore: The iron ore market rose sharply, but the spot market was still weak.
Viewpoint and logic:
In terms of futures, the 01 contract rebounded after a sharp drop yesterday, closing at 871.5 yuan/ton, an increase of 3.69%. The spot market was still volatile and weak. As of closing, Qingdao Port PB fines reported 1160-1170, SSF 785-795; Caofeidian Port PB fines 1160-1170, SSF 815-825; Tianjin Port PB fines 1170-1175, JMBF 1060-1070; Jiangyin Port PB fines 1215-1225, mixed fines 945-955. On the inventory side, mysteel announced the latest data of 15 ports’ inventory of 94.87 million tons, a slight decrease from the previous week. On the supply side, mineral resources company will put into operation a new iron ore production center in September, with an annual production capacity of 30 million tons.
On the whole, iron ore rebounded yesterday, but the room is expected to be limited. Although the number of iron ore arrivals in the fourth quarter will decrease year-on-year, there is a high probability that production restrictions will be implemented relatively strictly, and the supply and demand pattern of iron ore will gradually deteriorate. In the past month, the index, premium, etc. have all shown a sharp decline. 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.
Unilateral: cautiously bearish
Cross-species: initiate a long position of thread and hot-rolled coil and a short position 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;
2. The performance of steel demand at home and abroad;
3. Shipping data may change drastically;
4. The epidemic may aggravate and so on.
Rubber: Spot prices remained stable and futures prices fluctuated.
On August 11, the most-active RU contract closed at 14,820 (-90) yuan/ton, the price of mixed rubber reported 12,475 (0) yuan/ton, and the basis of most-active contract stood at -1520 yuan/ton (+90); the open interest of top 20 actively traded long positions was 87,432 (+2,845) lots, ,the short position was 125,079 (+9,510) lots, and the net short position was 37,647 (+6,665) lots.
On August 11, the most-active NR contract closed at 11,475 (+5) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,765 (0) US dollars/ton, the SMR stood at 1,750 (+5) US dollars/ton, and the SIR figure was 1,725 (0) US dollars/ton. The basis of most-active contract reported -292 (-7) 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 51.91 (-0.09), cup lump 47.45 (0), latex 50.50 (0), RSS3 55.55 (0).
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 were dominated by shocks. The price of raw materials in Thailand maintains a steady upward trend, and the increase in prices during the rubber delivery season may partly indicate that the supply is tight. Due to the impact of the epidemic in Southeast Asia, China’s domestic rubber imports have slowed down. Under the sluggish operating rate of domestic tire factories, domestic port inventories still maintain destocking, which strongly supports rubber prices. The slowdown in the pace of overseas imports has also affected the domestic raw materials and inventory patterns. Therefore, we see that the increase in the Shanghai Futures Exchange's inventory and warehouse receipts is also relatively limited. The current demand performance is weak, but its month-on-month ratio is improving, and price support is mainly on the supply side. Therefore, we will pay more attention to changes in spot prices in the future. 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: The White House hopes that OPEC will increase production, and the EIA data is slightly bullish for the market.
Oil prices fell first and then rose yesterday. The news of the White House asking OPEC to increase production has a negative impact on oil prices. But after the release of EIA data, oil prices gradually recovered from their decline. The EIA data itself is slightly more bullish for the market. Crude oil inventories fell but the decline was less than expected. Distillate oil inventories increased but gasoline inventories continued to decline. U.S. gasoline consumption data is still good, and the gasoline crack spread continue to be high. In addition, crude oil exports, which had fallen for two consecutive weeks, rebounded again, mainly due to the recent improvement in the economic performance of U.S. Gulf crude oil exports. At present, the fundamentals of the US market are still tight, and the fundamentals of oil destocking have not yet been reversed.
Copper: Copper prices continue to maintain stability.
In terms of spot: According to SMM, yesterday's spot market transactions were still difficult to see improvement. No matter whether it is trade buying or downstream buying, it was difficult to see a large amount of buying interest. Buyers and sellers had large differences in price, and there were few large transactions. In the morning market, Standard-Grade Copper initially reported a premium of 150 yuan/ton, but there was little buying interest in the market. Only after some holders slightly adjusted their quotation to a premium of 140 yuan/ton, some buyers began to purchase on-demand. After the second period, the holders maintained their price supporting sentiment, resulting in Standard-Grade Copper still reported a premium of 150-160 yuan/ton, but there were few actual transactions in the market. It was still difficult to see the spread between High-Grade Copper and Standard-Grade Copper. High-Grade Copper reported a premium of 160-180 yuan/ton, but the favor was limited, and the transaction was more insipid than that of Standard-Grade Copper. Hydro-Copperwas quoted at a premium of 70-100 yuan/ton under the guidance of brands such as BMK. Its quotation near the end of close continued to rise with the price of Standard-Grade Copper, and even a small amount of quotations with a premium of more than 100 yuan appeared. However, buying orders have limited acceptance of high premiums, and there were also few large transactions in the market.
Opinion: Last night, the US July CPI annual rate remained unchanged at 5.40%, 0.1 percentage point higher than expected. The core CPI annual rate in July was in line with the expected value of 4.30%, which was 0.2 percentage points lower than the previous value. This makes the dollar index fall in a short period of time. The copper price is maintaining stability above 70,000, and the current fundamental changes are relatively limited. Therefore, if the rise of the US dollar cannot continue, there may be more favorable conditions for the strengthening of copper 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. Although the US dollar trend was relatively strong after the interest rate meeting, it was largely an overdraft for future economic growth. 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
1. The Fed's monetary policy orientation
2. The trend of the US dollar index
3. Policy risks may increase.
PTA: TA processing fees fell slightly, and polyester production and sales data was weak.
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, 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.
1. 单边：谨慎偏多 2. 跨市：暂缓 3. 跨期：暂缓；4. 期权：暂缓
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