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Daily morning for Crude oil, PTA, natural rubber, iron ore, copper Iro (ZH & EN) 20210825

Fang submitted 2021-08-25 09:57:50

Iron ore: The Ferrous complex rose collectively, and the iron ore basis narrowed.

Yesterday, the Ferrous complex products collectively rose, led by coking coal and coke, and iron ore closely followed. The growth of thread and hot-rolled coil was the smallest, coking coal and coke saw huge gains, and the longs had got considerable profit. The hedging position which initiated a long position of coke and a short position of iron ore chose to leave the market when the coke made a substantial profit, making the short position on the iron ore futures also began to concentrate on liquidation to obtain profit. This also caused market participants to lighten their positions significantly and then prices rebounded significantly. Yesterday, the main iron ore 01 contract closed at 817.5 points, up 60.5 points from the previous day, with the open interest losing 23,000 lots. There has been a significant rebound in port spot simultaneously, but the rebound was obviously not as strong as that of futures. The lowest spot price of PB fines at Cao Port was 1,020 yuan/ton, an increase of 22 yuan/ton from the previous day. SSF reported 713 yuan/ton, up 13 yuan/ton. The transaction volume has increased, and the basis has narrowed significantly by 50 to 120.

On the whole, the current black market is still dominated by policies, and the policy of suppressing production is still being carried out step by step. The output of molten iron is steadily declining, and there is still room for decline. In the early stage, the production of crude steel was suppressed and the consumption of steel was not as expected, which forced the steel mills to significantly shrink their demand for scrap. Both the same period and the month-on-month ratio showed a sharp decline. Because of the reduction in the amount of crude steel brought about by the reduction in scrap, the production process was suppressed in the first half. China has greatly eased the pressure on iron ore from suppressed production. However, with the continuous deepening of suppressed production and the seasonal improvement in demand for finished products, the supply and demand of iron ore began to undergo a significant reversal in the second half as the crude steel suppressed production gradually began. In the short term, iron ore supply and demand have not deteriorated significantly. Although prices have fallen, they can still maintain high price levels. As the scope of production suppression expands, even if prices rebound, there will not be much room for iron ore pressures to gradually increase. We recommend short-selling opportunities for long-month rallies, or a hedge arbitrage combination of multiple materials and short ore mines, which can be over-matched.

On the whole, the current Ferrous complex is dominated by policies. The production restriction policy is still proceeding step by step. The output of molten iron has steadily declined, and there is still room for decline. 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 and the seasonal improvement in demand for the thread and hot-rolled coil, in the future, as the production restrictions of crude steel gradually begin, the supply and demand of iron ore will begin 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. In addition, the hedging arbitrage combination of initiating a long position of thread and hot-rolled coil and a short position of iron ore is also recommended.

Strategy: None

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)

Inter-period: None

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: Arrivals at the port fell short of expectations, and port inventories continued to decline.

On August 24, the most-active RU contract closed at 14,400 (+40) yuan/ton, the price of mixed rubber reported 12,500 (+25) yuan/ton, and the basis of most-active contract stood at -1275 yuan/ton (+135); the open interest of top 20 actively traded long positions was 87,907 (+18) lots, ,the short position was 130,580 (-626) lots, and the net short position was 42,673 (-644) lots.

On August 24, the most-active NR contract closed at 11,255 (-50) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,765 (+5) US dollars/ton, the SMR stood at 1,755 (+10) US dollars/ton, and the SIR figure was 1,715 (0) US dollars/ton. The basis of most-active contract reported -75 (+169) yuan/ton.

As of August 20: the total inventory of domestic exchanges was 211,342 (+4,278) tons, and the amount of warehouse receipts of exchanges was 186,380 (+4,810) tons.

Raw materials: Sheet rubber 52.39 (-0.14), cup lump 47.9 (+0.1), latex 51.2 (-1), RSS3 56.79 (+0.21).

As of August 19, the operating rate of domestic all-steel tire factories was 61.33% (-2.52%), and the operating rate of semi-steel tire factories was 57.29 (-2.91%).

Opinion: Driven by the warmer market sentiment, the rubber futures prices continued to rebound slightly yesterday. The prices of raw materials in Thailand's main producing areas presented a mix of gains and losses. As the weather improves, the price of raw materials is expected to continue to increase in the future. The current price support mainly comes from the supply side. As the epidemic affected China's domestic rhythm, domestic port inventories continued to decline. In terms of demand, due to the greater downward pressure on the domestic and external economies, the overall recovery is limited, but the future economic situation will still slowly deviate from the weak off-season situation. Therefore, the impact on the demand side is relatively small, and short-term prices more closely follow changes on the supply side. Currently, the rubber price is expected to fluctuate.

Strategy: Cautiously bullish

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

Crude oil: API crude oil and refined oil inventories fell.

We believe that oil prices remain high in the fourth quarter. Although the probability of oil prices exceeding $80/barrel is not high, the room for a substantial downward trend is also limited. On the one hand, it is due to demand recovery, and on the other hand, due to OPEC's production control. If there is an oversupply, OPEC will adjust quickly, and supplies from the United States and Iran will not recover soon. On the demand side, it is expected to recover to around 98 million barrels per day by the end of the year, a year-on-year increase of about 6 million barrels per day. The recent epidemic has indeed caused a downward revision in demand, but the magnitude is not too great (less than 1 million barrels per day). The momentum and trend of demand recovery have not been disrupted. The recent increase in the number of drilling rigs in the United States is mainly due to the decline in the number of DUCs (drilled but not completed), and more wells need to be drilled to supplement the number of DUCs. But more drilling does not mean a faster recovery in crude oil production. At present, shale oil producers still maintain a relatively high capital expenditure model. The probability of a significant recovery in U.S. crude oil production in the fourth quarter is not high, and it is expected to recover to 12 million barrels per day.

Strategy: neutral

Risk: None

Copper: The Fed's reduction in debt purchases is still an important signal of market concern.

Spot: According to SMM, trading in the spot market continued to pick up yesterday, and part of the downstream steadily entered the market and maintained rid-demand purchases. In addition, as some buying orders had higher demand for the current month's contract, the market quotation was firmer than the previous two days. In the morning session, Standard-Grade Copper was initially quoted at a premium of 200 yuan/ton, but there were fewer inquiries in the market. However, holders are reluctant to adjust their prices too much. Some holders slightly adjusted their prices to a premium of 190 yuan/ton, which made the market's trading activity rebound. After the second trading session, there was a small amount of supply outflow with a premium of 180 yuan/ton in the market. High-Grade Copperoffered a quotation of a premium of 200-220 yuan/ton, and the overall quotation was relatively firm. However, the market is not as popular as that of Standard-Grade Copper and the transaction was slightly insipid. The supply of Hydro-Copper was still scarce, and the spread between the current month's contract and the next month was large. Holders all hoped to support the current month’s price at a premium of 100 yuan, which made buyers and sellers more divergent, and there are few large transactions in the market.

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 Feds 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

Focus point:

1. The Fed's monetary policy orientation

2. The trend of the US dollar index

3. Policy risks may increase.

PTA: Yisheng's second production line for new materials has been put into production; TA operating rate has gradually picked up.

Balance sheet outlook: Under the background of the full implementation of the maintenance of filament companies, the PTA September balance sheet ushered in the first inflection point of inventory accumulation, but the accumulation rate is controllable. In the context of the fall in gasoline premiums, Asia's PX September balance sheet inventory accumulation is expected to expand.

Strategic recommendations:

(1) Unilateral: take a wait-and-see attitude, and to wait for the PTA processing fee to be further compressed.

(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





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