Iron Ore: Demand is steadily declining, and both futures and spot markets are operating weakly.
Opinion and logic: Yesterday, both the open interest and trading volume of iron ore 2201 contract rose sharply, and it closed at 730 yuan/ton, down 17 yuan/ton, or 2.28%. Qingdao Port PB fines reported 970 yuan/ton, down 7 yuan/ton; SSF reported 640 yuan/ton, down 23 yuan/ton; the spread between high and low-grade products continued to widen to 330 yuan/ton. Yesterday, the port traded a total of 751,000 tons, and the performance of the transaction data continued to be weak.
The total inventory of imported sintering powder from 64 steel mills was 14.6496 million tons, a decrease of 4% from the previous month. The total daily consumption of sintering powder was 524,600 tons, a decrease of 3.8% from the previous month. Shagang Group plans to take turns overhauling the two bar lines from September 16 to 30, which is expected to affect the thread output about 36,400 tons. Xuzhou Jinhong originally scheduled the whole plant inspection from September 18th to October 8th, and it is now advanced to September 10th, which is expected to affect the production of snails by 4000 tons/day. Jiangsu: From September 8th to 30th, launch a special energy-saving supervision action for enterprises with a comprehensive energy consumption of 50,000 tons of standard coal or more in 2021.
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. The output data of five building materials commonly used in construction released by the Steel Union yesterday showed that steel output is still steadily declining, and iron ore prices will continue to be weak.
Unilateral: initiate a short position when the price hits high
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: During the peak season for rubber delivery, raw material prices continued to be weak.
On September 9, the most-active RU contract closed at 13,320 (+5) yuan/ton, the price of mixed rubber reported 11,850 (0) yuan/ton, and the basis of most-active contract stood at -1070 yuan/ton (-205); the open interest of top 20 actively traded long positions was 94,361 (-3,905) lots, ,the short position was 137,191 (-3,826) lots, and the net short position was 42,830 (+79) lots.
On September 9, the most-active NR contract closed at 10,470 (+60) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,665 (+10) US dollars/ton, the SMR stood at 1,655 (+10) US dollars/ton, and the SIR figure was 1,635 (+30) US dollars/ton. The basis of most-active contract reported 95 (+124) 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), cup lump 44.15 (-0.3), latex 46.50 (-0.8), RSS3 51.49 (0).
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 be weak yesterday. The fundamentals of rubber have not changed much this week, while market prices have declined significantly. The fall in rubber prices is more a reflection of the pessimistic expectations of future supply and demand. On the one hand, demand continues to be weak, affected by domestic environmental inspections and the decline in car sales caused by insufficient overseas chips. At present, Thailand's main production areas are facing heavy rainfall, and short-term rubber delivery may be suppressed. It is expected that raw material prices will stabilize. The short-term downside of market prices may also be limited, and investors should not be too bearish. Due to the weak supply and demand in the future, it is expected that there is not much room for the upward repair of the rubber price. It is currently recommended to take a wait-and-see attitude.
Risks: production may increase substantially, inventory may continue to accumulate, and demand may decrease substantially, etc.
Crude oil: China releases its strategic reserve crude oil inventory.
Yesterday China decided to release another batch of strategic reserves to curb oil prices. The difference from the last time is that the release of reserves was officially released through official media, and the purpose of stabilizing prices is even more obvious. However, the quantity and location of the reserves have not been announced this time, but it is certain that they will be issued to the main refinery. We believe that the nature of this release of reserves is more of the inventory rotation between strategic reserves and commercial reserves, that is, the currently released strategic reserves may be returned to the government after a period of time, but this will still curb the willingness of major refineries to purchase crude oil in the short term. However, the willingness of local refineries and large refineries to purchase is still strong. Refineries are still waiting for the issuance of the fourth batch of crude oil import quotas, and some refineries and even Zhejiang Petrochemical have begun to process fuel oil. We believe that this release of reserves may partly hedge the impact of the future issuance of crude oil quotas, but China’s crude oil buying interest in the fourth quarter is expected to recover marginally.
Strategy: Unilaterally neutral, go long of U.S. distillate oil crack spreads
Risk: The impact of the hurricane was less than expected.
Copper: Some downstream orders have slowed down, and the willingness of downstream replenishment has weakened.
Spot: According to SMM, the market price dropped slightly yesterday, but it still did not attract a lot of downstream buying interest. Although premiums and discounts have continued to pick up slightly, the differences between buyers and sellers on prices remain, resulting in few large transactions in the market. Standard-Grade Copper was quoted at a premium of 40-50 yuan/ton in the morning session, but there were few inquirers in the market. Due to demand for spot exchange, some holders slightly adjusted their quotations to a premium of 30 yuan/ton, which slightly improved market transactions. However, the holders were unwilling to adjust the price again, and the buyers and sellers have large differences on the price, which caused the overall market transaction to be weaker than expected. The supply of High-Grade Copper was relatively tight, with the overall quotation reporting a premium of 50-70 yuan/ton. Some holders even offered a premium of 70 yuan/ton, but they had little willingness to adjust prices, highlighting their reluctance to sell. The overall supply of Hydro-Copper was tight. Under the guidance of some MV, BMK and other brands, the overall quotation was 30-10 yuan/ton, and it was difficult to see the spread with some poorer brands of Standard-Grade Copper
Viewpoint: On the macro level, the European Central Bank kept the three key interest rates unchanged, in line with market expectations. In addition, the European Central Bank kept the rate of debt purchases for the Asset Purchase Program (APP) unchanged at 20 billion euros per month and slowed down the rate of debt purchases for the Emergency Anti-epidemic Bond Purchase Program (PEPP) in the fourth quarter. The impact of this interest rate meeting on the market is relatively limited. After the announcement of the resolution, the US dollar index has not fluctuated much, which also reflects that the market sentiment is not overly surprised. The number of initial claims for unemployment benefits from the United States to September 4 was 310,000, a record low since the week of March 14, 2020. The pessimism that the previous non-agricultural data was significantly lower than expected has improved. After the data was released, the US dollar index pulled up. But at the same time, it should be noted that the US federal government ended the new crown bailout bill on September 6, which to a certain extent also promoted the decline in the number of initial jobless claims. Domestically, CPI and PPI were announced in August. CPI increased by 0.8% year-on-year. Affected by the epidemic, CPI weakened slightly. PPI increased by 9.5% year-on-year, exceeding market expectations and previous values, and hitting the highest value since September 2008, mainly due to the increase in prices of coal, chemicals and steel products. The PPI-CPI scissors gap reached an all-time high of 8.7% in August, and the profits of mid- and downstream companies were eroded. The structural contradictions in the economy are magnified, increasing downward pressure on the economy. From a fundamental perspective, in terms of consumption, according to SMM data, new orders for wire and cable, copper strip, and refined copper rod companies have all declined month-on-month, and new orders for enameled wire companies have slowed down. At present, the 09-10 contract continues to maintain a high level back structure, and downstream companies are not willing to stock up under the current structure, and the wait-and-see sentiment is obvious. However, after two days of price reductions, Shanghai copper premiums and discounts have picked up, and South China copper premiums and discounts have continued to decline. In terms of inventory, LME copper inventory and SHFE continued to destock. In terms of imports, along with the rebound in domestic and foreign prices, the profit and loss of imports continued to rise. On the whole, the downward pressure on the economy is still there, and consumption data at the beginning of September showed weak performance. Unilaterally, we hold the judgment that the market will maintain wide fluctuations and there might be downside risks.
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: PX still has a maintenance plan in the future; the price of filament is reduced for promotion.
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