Iron Ore: The consumption of thread and hot-rolled coil was weak, and the trend of iron ore was uncharacteristic.
Yesterday, the overall performance of Ferrous complex was weak, the price of thread and hot-rolled coil dropped significantly, and coking coal and coke simultaneously followed. However, iron ore has uncharacteristically became the strongest performer. Yesterday afternoon, the Steel Union data showed that the output of thread and hot-rolled coil remained stable. Although the extent of destocking has increased, the overall volume is not enough. As the demand for the balance sheet did not perform as expected, it also cast a shadow over the peak season of "Golden September and Silver October". In terms of futures, the main iron ore 01 contract surged strongly during the intraday session, reaching a maximum of 844.5 yuan/ton, and finally closing at 816 points, up 13.5 points from the previous day, with open interest losing 26,000 lots. Port spot prices fluctuated, with most of them rising, and only Carajás iron ore fines (SFCJ) with higher premiums declined. The lowest spot price of PB fines at Cao Port was 1,037 yuan/ton, an increase of 12 yuan/ton from the previous day. SSF reported 718 yuan/ton, an increase of 11 yuan/ton, and the spot transaction was 1.01 million tons, an increase of 320,000 tons from the previous month. Recently, the port spot market has become more active. Towards the end of the month, there were purchases by traders in both areas of Tangshan and Shandong. Most steel mills continue to purchase on-demand, and the main types of transactions are mostly low-to-medium-grade resources. Among them, the demand for mixed fines in low-to-medium-grade resources has increased.
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, even if prices rebound, there will not be much room for a rebound. In the future, the pressure on iron ore will gradually increase, and the opportunities of initiating a short position of the distant futures contract of iron ore when price hits high 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.
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: Market prices fell sharply, and the spread between futures and spot prices narrowed.
On August 26, the most-active RU contract closed at 14,055 (-420) yuan/ton, the price of mixed rubber reported 12,300 (-225) yuan/ton, and the basis of most-active contract stood at -930 yuan/ton (+370); the open interest of top 20 actively traded long positions was 89,161 (+1,254) lots, ,the short position was 128,608 (-1,972) lots, and the net short position was 39,447 (-3,226) lots.
On August 26, the most-active NR contract closed at 10,900 (-370) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,745 (-40) US dollars/ton, the SMR stood at 1,735 (-40) US dollars/ton, and the SIR figure was 1,685 (-40) US dollars/ton. The basis of most-active contract reported 7 (+111) 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 52.23 (-0.16), cup lump 47.7 (-0.2), latex 50.8 (0), RSS3 55.56 (-0.57).
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: The price of rubber fell sharply late yesterday, which may be related to the close delivery of the RU09 contract and the continued decline in the operating rate of domestic tire factories. Yesterday, the prices of raw materials in Thailand's main producing areas fell slightly. With the gradual release of production, the price of raw materials is suppressed. Entering September, with the reduction of rain, the release of raw material production is expected to accelerate. At present, the support of domestic rubber prices mainly comes from the low port inventory and the support of domestic raw material prices. However, demand is under greater downward pressure due to the internal and external economies, and the recently announced car sales and heavy truck sales have all dropped significantly. From a seasonal perspective, the future economic trend will slowly get out of the off-season influence, but the rebound will be restrained by weaker demand. Therefore, the impact on the demand side is relatively small, and short-term prices more closely follow changes on the supply side. In the short term, we need to pay attention to the RU September contract delivery situation and the suppression of the RSS3 window. It is expected that prices will remain range-bound.
Risks: production may increase substantially, inventory may continue to accumulate, and demand may decrease substantially, etc.
Crude oil: The epidemic is under control, and China's oil consumption is expected to gradually recover.
China's consumption recovery is still the focus of the market. With the number of new infections in China cleared, the current round of the epidemic has been effectively controlled. From the perspective of refined oil consumption, the impact of this epidemic has gradually subsided. From the traffic congestion index, China has recovered to around 90%. Regarding the recovery of crude oil consumption, we still need to wait for the end of the inspection of local refining quota transactions and tax evasion (it is reported that it is nearing completion), and the issuance of a new round of quotas in the future. We estimate that the local refinery quota of approximately 500,000 barrels per day may be reduced. However, considering the newly added crude oil quotas of Zhejiang Petrochemical, Shenghong and other large refining and chemical plants, the overall quota is expected to be still considerable. We believe that after the issuance of future quotas, China's crude oil buying interest will return in the fourth quarter.
Copper: There are frequent hawkish speeches from global central banks.
Spot: According to SMM, trading in the spot market was still relatively insipid yesterday. The mainstream market has already quoted prices for the next month's contract, but due to the high demand for the current month of some market participants, the spread between the current month and the next month is around 20-30 yuan/ton. In the morning session, Standard-Grade Copper began to offer a premium of 190 yuan/ton for the next month contract, and then quickly dropped to 170-180 yuan/ton. Part of the buying order remained purchase on demand at the price of a premium of 170 yuan/ton. After that, there was little resources with a premium of 170 yuan/ton in the market, and then the overall price of Standard-Grade Copper stabilized at 180-190 yuan/ton. The large spread between High-Grade Copper quotations and that of Standard-Grade Copper was still difficult to see. CCC-P even quoted a premium of 190 yuan/ton like Standard-Grade Copper, but there were still few large transactions in the market. Although Guixi-Copper was priced at a premium of 210 yuan/ton, there was little buying interest in the market. The overall supply of Hydro-Copper was still tight, and the quotation stood at a premium of 90-110 yuan/ton. However, the strong willingness of sellers to support the price made the buyers and sellers have greater differences in prices, and there were 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 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: There is still no improvement in the number of weaving orders; PTA processing fees are still weak.
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.
(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