Iron Ore: Under strong policy pressure, the weakening trend is difficult to change.
Yesterday, the open interest of the iron ore 2201 contract shrank, while its trading volume rose, and it closed at 747 yuan/ton, up 0.5 yuan/ton, or 0.07%. Qingdao Port PB fines reported 977 yuan/ton, down 20 yuan/ton; SSF reported 663 yuan/ton, down 5 yuan/ton; the spread between high and low-grade products continued to shrink to 314 yuan/ton. Yesterday, the port had a total of 652,000 tons of transactions, and the transaction data remained weak.
In September, Shandong's leading building materials steel plant planned to produce 1.49 million tons, a decrease of about 250,000 tons from August. On September 8, a 1,350 cubic meter blast furnace in Shandong Xinhua Special Steel was shut down. The preliminary plan was to stop production for 2 months for maintenance, which is expected to affect the output of 3000 tons/day. On September 11, Bao steel Mei steel 2#1280 cubic blast furnace was overhauled until the end of the year, affecting an average daily output of about 3000 tons/day. Starting from September 15th, Danyang Longjiang Steel plans to suspend production for one month for maintenance, which is expected to affect the output of 150,000 tons.
On the whole, starting in September, the national crude steel production limit reorganization has accelerated. Steel mills across China are frequently directly or indirectly impacted by various policy events such as limited crude steel production, two-high project governance, dual energy consumption control, environmental protection inspections, and sports events. Blast furnaces and electric furnaces have been shut down and overhauled significantly, and sintering machines have been planned to stop production from time to time. With the overall loose supply of iron ore, the demand side is expected to further decline. Recently, due to the obvious shortage of coke, another raw material for the production of molten iron, there may be expectations that blast furnace production will be forced to stop. If this happens, it will further reduce domestic demand for iron ore. We maintain our view of initiating a short position when the price hits high unchanged.
Unilateral: initiate a short position when the price hits high; tend to be bearish in the medium term
Cross-species: 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
Concerns and risks:
1. The intensity of production restriction at the thread and hot-rolled coil end;
2. Inventory replenishment for Mid-Autumn Festival and National Day;
3. Shipping data may change drastically;
4. The epidemic may aggravate and so on.
Rubber: The supply and demand are weak, and the price of rubber fell sharply.
On September 8, the most-active RU contract closed at 13,315 (-405) yuan/ton, the price of mixed rubber reported 11,900 (-150) yuan/ton, and the basis of most-active contract stood at -865 yuan/ton (+230); the open interest of top 20 actively traded long positions was 98,266 (+7,990) lots, ,the short position was 141,017 (+4,221) lots, and the net short position was 42,751 (-3,769) lots.
On September 8, the most-active NR contract closed at 10,775 (-65) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,655 (-40) US dollars/ton, the SMR stood at 1,645 (-55) US dollars/ton, and the SIR figure was 1,605 (-30) US dollars/ton. The basis of most-active contract reported -30 (+194) yuan/ton.
As of September 3: the total inventory of domestic exchanges was 225,354 (+5,762) tons, and the amount of warehouse receipts of exchanges was 192,480 (+3,700) tons.
Raw materials: Sheet rubber 49.6 (-0.95), cup lump 44.45 (-0.55), latex 47.30 (-1), RSS3 51.49 (-1.26).
As of September 2, the operating rate of domestic all-steel tire factories was 50.08% (-5.81%), and the operating rate of semi-steel tire factories was 54.52 (-3.13%).
Opinion: The price of rubber continued to fall yesterday, and the spread between futures and spot prices narrowed significantly. There was no obvious news to drive the market during the intraday trading, which was mainly caused by weak supply and demand combined with broken technical points. With the decrease of rain, the release of raw materials during peak seasons increases. Recently, the price of raw materials in Thailand's main producing areas has continued to fall, and the price has been in the middle level of recent years. The increase in domestic raw materials has brought about a recent rebound in stocks on exchanges. The overall supply side shows an increasing momentum, but due to the hindrance of the pace of arrivals, the pressure reflected on the domestic port inventory is not large. Domestic downstream demand is weak, but due to the seasonal peak season, the overall weakness is mainly stable. In the short-term, prices are expected to be weak and volatile.
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 sharply.
Yesterday API released inventory data, this data reflects the impact of the hurricane for the first time. Judging from the inventory data itself, both crude oil and refined oil inventories have fallen sharply. However, crude oil inventories fell below expectations by about 1 million barrels per day, while gasoline inventories fell far more than expected, and distillate inventories fell below expectations. It can be seen that the impact of this hurricane on the supply of refined oil is more significant, and the refined oil gap caused by the shutdown of the Louisiana refinery can only be supplemented by increasing production at the Texas refinery or importing from European refineries. At present, the profits of European refineries are performing well. In addition, in terms of crude oil, the discounts of major oil types such as LLS and Mars in Louisiana have reached a new high, reflecting that the impact of Hurricane Ida on actual supply is still relatively high. At present, the supply of nearly 1.4 million barrels per day in the Gulf of Mexico has not been restored. This is the longest time a hurricane has affected the supply side in recent years.
Strategy: Unilaterally neutral, go long of U.S. distillate oil crack spreads
Risk: The impact of the hurricane was less than expected.
Copper: Many institutions lowered their expectations for the US economy.
Spot: According to SMM news, the spot market's premiums and discounts have stabilized after experiencing the sharp drop in the previous day. After the market price dropped slightly, the buying interest in the downstream picked up slightly, which to a certain extent supported the premium and discount to stop falling and stabilize. Standard-Grade Copper started to report a premium of 30-40 yuan/ton in the morning session, but there were still few inquirers in the market. Some holders quickly adjusted their quotations to a premium of 10-20 yuan/ton, but it was still difficult to see a lot of buying interest in the market. The supply of High-Grade Copper was relatively scarce. High-Grade Copper was quoted at a premium of 70 yuan/ton in the morning session, and the holders were reluctant to sell and wanted to support such price. However, under the drag of Standard-Grade Copper, the overall price of High-Grade Copper finally reached 40-60 yuan/ton. However, the buying interest in the market was limited, resulting in few large transactions in the market. Hydro-Copper was quoted at a discount of 60-40 yuan/ton under the guidance of ESOX and other brands.
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: Entering the inventory accumulation cycle, being allocated by initiating short positions under the background of no hype.
Balance sheet outlook: In the context of continuous filament maintenance, the PTA September balance sheet ushered in the first inflection point of the inventory accumulation, but the accumulation rate is controllable. In September, the Asian PX balance sheet accumulated only a small amount of inventory.
(1) Unilateral: Initiate a long position when the price hits low. Under the background of rising coal chemical industry, PTA has nothing to do with coal; and under the background of short-term inventory accumulation cycle, it is hedged by funds and was allocated by initiating short positions, therefore PTA valuation has declined.
(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