Iron ore: The effect of limiting the production of crude steel was significant, and iron ore futures continued to fall.
Yesterday, the Steel Union announced the production, sales and inventory data of the five building materials commonly used in construction. Through data analysis, we believe that the output of steel is 10.16 million tons, a week-on-week decrease of 750,000 tons. Due to production restrictions, the iron ore consumption side has been fully restrained, and iron ore futures have continued to fall recently. To the close, the iron ore 01 contract closed at 761 points, 52 points lower than the previous trading day. In terms of spot, the price of imported iron ore at Caofeidian Port fluctuated downward in the afternoon session, with a cumulative drop of 30-55 yuan/ton throughout the day. The current PB fines reported 1030-1040 yuan/ton, the Newman fines 1420-1430 yuan/ton, and Carajás iron ore fines (SFCJ) 1425-1435 Yuan/ton, SSF 720-730 yuan/ton. In terms of basis, futures and spot prices both fell, while iron ore futures and spot basis changed little. The PB fines basis corresponding to the 09 contract was 270 points, and the figure for SSF was 35 points.
On the whole, the current Ferrous complex is dominated by policies. Due to the limited production and lower-than-expected consumption, steel mills' demand for scrap steel has shrunk sharply, and the month-on-month and year-on-year ratios have both fallen sharply, which has greatly eased the pressure on iron ore caused by production restrictions. However, with the continuous deepening of production restrictions, the supply and demand of iron ore began to undergo a significant reversal. In the short term, the supply and demand of iron ore has not deteriorated significantly. Although the price has fallen, it can still maintain a high price level. As the scope of production restriction expands, the pressure on iron ore will gradually increase, and the opportunities of initiating a short position of the distant futures contract of iron ore is recommended.
Unilateral: tend to be bearish in the medium term
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 (01 contract) and a short position of iron ore (01 contract)
Spot-Futures Arbitrage: None
Options: buying a put option when price hits high
Concerns and risks:
1. The intensity of production restriction and the policy orientation at the thread and hot-rolled coil end may be not as good as expected;
2. The off-season demand performance of the thread and hot-rolled coil end may be not as good as expected;
3. Shipping data may change drastically;
4. The epidemic may aggravate and so on.
Rubber: The market sentiment weakened, and the price of rubber fell sharply.
On August 19, the most-active RU contract closed at 14,490 (-490) yuan/ton, the price of mixed rubber reported 12,575 (-200) yuan/ton, and the basis of most-active contract stood at -1165 yuan/ton (+365); the open interest of top 20 actively traded long positions was 88,282 (-10,039) lots, ,the short position was 136,019 (-7,408) lots, and the net short position was 47,737 (+2,631) lots.
On August 19, the most-active NR contract closed at 11,435 (-395) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,780 (-30) US dollars/ton, the SMR stood at 1,765 (-25) US dollars/ton, and the SIR figure was 1,715 (-30) US dollars/ton. The basis of most-active contract reported -313 (+190) yuan/ton.
As of August 13: the total inventory of domestic exchanges was 207,064 (+5,914) tons, and the amount of warehouse receipts of exchanges was 181,570 (-240) tons.
Raw materials: Sheet rubber 52.8 (0), cup lump 49 (0), latex 52.5 (+0.8), RSS3 57.61 (+0.22).
As of August 12, the operating rate of domestic all-steel tire factories was 63.85% (+1.17%), and the operating rate of semi-steel tire factories was 60.2 (+0.78%).
Opinion: Concerned about the Fed's shrinking balance sheet, the overall market sentiment was weak yesterday, which led to a sharp fall in rubber futures prices. The main focus of recent rubber prices is the impact of the Southeast Asian epidemic on the supply side. Due to the impact of the epidemic in Indonesia, the operating rate of processing plants has dropped, resulting in a slowdown in production. In addition, the slowdown in exports to China caused by the Thailand epidemic has caused the recent continuous decline in China's domestic port inventory, which has formed a strong support for the corresponding price. In the future, demand will usher in a seasonal improvement from the previous quarter, but overall demand will deviate. Therefore, the impact on the demand side is relatively small, and the price impact is mainly on the supply side. Investors can pay attention to when the delayed pressure on domestic imports will appear, and the price may usher in an inflection point. In August, due to the lack of expected arrivals at ports and more rain at home and abroad, it is difficult to see substantial pressure on supply. It is expected that the short-term price will continue to fall and the room will be limited.
Risks: production may increase substantially, inventory may continue to accumulate, and demand may decrease substantially, etc.
Crude oil: Oil prices continue to fall, OPEC may postpone the increase in production.
Oil prices continue to decline, but we believe that the main factor driving the decline in oil prices in the near term comes from the macro level. The minutes of the Fed meeting on Wednesday showed that most officials expect to reduce the scale of bond purchases this year. The US dollar is currently strong, and macro-allocation funds based on re-inflation trading logic are gradually withdrawing. The current crude oil fundamentals have not undergone a fundamental reversal. Although India is releasing strategic reserves recently and China is suffering from the lack of buying interest, this is more of a means for consumer countries to cope with high oil prices. However, the pattern of global oil inventory destocking has not changed. We believe that the impact of the epidemic is still a phased one, and the demand recovery is currently suspended rather than over. In addition, in the context of weak oil prices, the possibility of OPEC delaying or reducing production increases is also increasing. Although macro factors continue to be bearish for oil prices, as the fundamentals have not yet reversed, the continued downside of oil prices is limited.
Copper: The U.S. dollar continued to strengthen, and copper prices fell to a large extent.
Spot: According to SMM, the market opened lower for two consecutive days yesterday, and the decline of more than 2,000 yuan/ton made the downstream market to hold a wait-and-see attitude again. In addition, there were more sources of High-Grade Copper in the market, which continued to put pressure on the quotation of Standard-Grade Copper. Standard-Grade Copper was initially quoted at a premium of 280 yuan/ton in the morning session, but there were few inquirers in the market. After being suppressed by CCC-P and other brand quotations, Standard-Grade Copper’s quotation was quickly lowered to a premium of 250-260 yuan/ton, but the buying power still maintained a wait-and-see attitude. After the second trading session, the demand for trade hedging orders to make a profit and exchange for spot to leave the market caused the holders to quickly adjust the quotation again to a premium of 230-240 yuan/ton, but there was still little buying interest in the market. In the late trading, there was even a quotation that reached a premium of 200-220 yuan/ton from the source of supply. High-Grade Copper fell rapidly under the guidance of brands such as CCC-P, ENM, and Peruvian, remaining the same with the quotations of Standard-Grade Copper. This not only squeezed the price space of Standard-Grade Copper, but also guided the price adjustment of Standard-Grade Copper, so that its overall quotation stood at a premium of 240-250 yuan/ton. It was also difficult for Guixi-Copper to maintain a strong price support sentiment. The quotation of Guixi-Copper reported a premium of 250 yuan/ton at the end of the trading session, but it was still difficult to attract buyers into the market. On the contrary, the supply of Hydro-Copper was unexpectedly tight, and the quotation stood at a premium of 170-200 yuan/ton. However, under the wait-and-see attitude of the downstream, stockholders rarely had the willingness to substantially adjust quotations.
Opinion: Yesterday, as the US dollar continued to strengthen and stood above the 93.5 mark, copper prices experienced an increased degree of decline. In addition, the State Reserve Bureau's expected management of releasing reserves has exacerbated the drop in copper prices. The current copper price presents a volatile and weak pattern, and the Fed’s taper expectations continue to exist, which may have an adverse effect on non-ferrous metals including copper. But for the time being, in the process of falling copper prices, terminal orders have also performed relatively well. This may make the destocking state continue, so it is not recommended to be too bearish on copper prices at present.
On the macro level, the global central bank will continue to maintain the current ultra-loose monetary and fiscal policies in the short term. However, the recent strengthening of the Fed’s taper expectations has led to a substantial strengthening of the U.S. dollar, which is not very beneficial to the overall non-ferrous metal sector, including copper. 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, there is currently no situation in which copper has accumulated inventory immediately after entering the off-season. In the future, investors need to continue to pay attention to the emergence of inventory turning points.
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 drove costs down, and the reduction in polyester production resulted in compression of PTA processing fees.
Balance sheet outlook: Under the background of the full implementation of the maintenance of filament companies, the PTA August balance sheet was revised from a medium destocking to a small destocking; the inflection point of the inventory accumulation was advanced to near the end of August, but the inventory accumulation rate is controllable; The Asian PX August balance sheet went flat.
(1) Unilateral: take a wait-and-see attitude, and to initiate long positions after processing fees were compressed by the production reduction of filament companies.
(2) Intertemporal: For the 1-5 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 maintenance time of polyester reduced load..
策略：1. 单边：中性 2. 跨市：暂缓 3. 跨期：暂缓；4. 期权：暂缓
关注点：1. 美联储货币政策导向 2.美元指数走势 3.政策风险加剧