Iron Ore: Market sentiment weakened and iron ore prices fell.
Yesterday, the iron ore 01 contract fell, and the closing price was 769.5, down 1.5 yuan/ton from the previous day, and the spot price followed its decline.
On the supply side, iron ore shipments this week saw a larger drop compared to the previous period. Among them, the global iron ore shipment totaled 30.03 million tons, a decrease of 5.49 million tons from the previous month. Shipments in Australia and Brazil fell by 3.31 million tons, while shipments in the remaining countries fell by 2.18 million tons. The overall iron ore shipment volume fell short of expectations and was lower than the level of the same period last year. At the same time, due to the high sea freight rate and the iron ore discount, the current ore price has fallen close to the cost line of some non-mainstream ore. If the price of ore continues to fall or will cause a partial reduction, and the enthusiasm for domestic ore production is also affected, the overall supply of iron ore will increase slowly.
On the demand side, the national production restriction policy has been steadily advanced, resulting in a continuous decline in molten iron output. Taking into account that the production limit will be completed in advance to the end of November, this may cause a decline in domestic iron ore consumption. In the future, steel smelting will still be subject to the dual restrictions of staggered production during the heating season and the Winter Olympics, making it difficult for domestic iron ore consumption to increase.
On the whole, the shipment volume of iron ore fell short of expectations, and the recent sharp increase in ocean freight has also increased the landed cost of iron ore. However, considering the steady advancement of national crude steel production restrictions and requiring companies to complete the reduction task by November, domestic iron ore consumption has been suppressed. The price of iron ore is expected to maintain a slight fluctuation, and a wait-and-see attitude is recommended.
Cross-species: initiate a long position of thread and hot-rolled coil and a short position of iron ore
Spot-Futures Arbitrage: None
Concerns and risks:
1. The implementation strength and extent of the crude steel production restriction policy;
2. The risk of rising ocean freight.
Rubber: The decline in port inventory slowed down.
On October 12, the most-active RU contract closed at 14,785 (+10) yuan/ton, the price of mixed rubber reported 12,675 (+50) yuan/ton, and the basis of most-active contract stood at -660 yuan/ton (+240); the open interest of top 20 actively traded long positions was 88,066 (+2,688) lots, the short position was 127,715 (+4,196) lots, and the net short position was 39,649 (+1,508) lots.
On October 12, the most-active NR contract closed at 11,960 (+25) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,805 (0) US dollars/ton, the SMR stood at 1,795 (0) US dollars/ton, and the SIR figure was 1,755 (0) US dollars/ton. The basis of most-active contract reported -650 (-31) yuan/ton.
As of October 8: the total inventory of domestic exchanges was 247,859 (+4,578) tons, and the amount of warehouse receipts of exchanges was 202,360 (+660) tons.
Raw materials: Sheet rubber 53.15 (+0.96), cup lump 48.25 (+0.25), latex 52 (+1), RSS3 56.22 (+0.57).
As of September 30, the operating rate of domestic all-steel tire factories was 53.86% (-1.9%), and the operating rate of semi-steel tire factories was 50.06% (-2.5%).
Opinion: The latest port inventory announced yesterday continued a slight downward trend, but the recent drop in ocean freight will bring ease of logistics and transportation. In view of seasonality, it is expected that the turning point of inventory accumulation will come again. Therefore, when the current market price hits 15,000 yuan/ton, the space above the price may be relatively limited, unless the supply side influence is further increased, resulting in insufficient domestic spot supply. At present, domestic rubber delivery is basically normal, and supply is expected to resume after the typhoon weather passes. And because the rains in Thailand's main producing areas have not yet completely ended, short-term output from overseas supply is unlikely to rebound significantly. Therefore, we expect that the momentum for prices to continue to rise is slowing down, but supply will take time to reflect, and short-term prices will not be able to fall sharply. Investors are advised to focus on short-term operations.
Strategy: cautiously bullish
Risks: production may increase substantially, inventory may continue to accumulate, and demand may decrease substantially, etc.
Crude oil: Domestic diesel prices are strong, and exports may continue to decline in the future.
During the National Day, China's diesel market price rose by nearly 500 yuan/ton, which showed strong performance among refined oil products and formed a significant difference in the performance of gasoline prices. We think it is mainly due to the fact that some factories and small and medium-sized industrial and commercial enterprises have begun to use diesel generators as an alternative power generation option. It is reported that the rental price of diesel generators has doubled. However, as stated in our previous report, although the strong diesel price has boosted the profitability of refineries, it is due to environmental inspections and local refinery power curtailment (including the recent energy report mentioned that some refineries have production capacity false reports). These policy factors will restrain the operating rate of domestic refineries, and the shortage of diesel will be transmitted through the reduction of diesel exports and the purchase of crude oil with higher diesel yield by refineries.
Strategy: Unilaterally cautiously bullish, go long of U.S. distillate oil crack spreads
Risk: The United States may substantially release its strategic crude oil reserves.
Copper: The downstream operating rate fell short of expectations, and premiums and discounts fell sharply.
Spot: According to SMM, the spot market premium continued yesterday's sharp downward trend. After the market's inter-month BACK structure returned to 300 yuan/ton, and the market price fluctuated at a high level of 71,000 yuan/ton, market participants and downstream buyers took a wait-and-see attitude, while holders desperately dumped the goods in exchange for spot. At the beginning of the morning session, Standard-Grade Copper began to offer a premium of 120-150 yuan/ton, but there were very few inquiries in the market. Upon seeing this, some holders quickly adjusted their prices to a premium of 80-100 yuan/ton, and after 9:30, their quotations have dropped to a premium of 50-60 yuan/ton. Before the second period, market quotations stopped at a premium of 10-20 yuan/ton, but the overall trading activity was still relatively insipid. After the second trading session, the transaction did not improve slightly until the market price dropped sharply. With the continuous inflow of imported brands such as CCC-P and ENM, High-Grade Copper 's quotations fell rapidly. CCC-P rarely had a large number of transactions even when the quotation reached a premium of around 50 yuan/ton. Only Guixi-Copper stood at a premium of around 100 yuan/ton, but the downstream buying acceptance was not high, and there were few transactions in the market. The price of Hydro-Copper was adjusted accordingly with the inflow of imported copper. Hydro-Copper as a whole was quoted at a discount of around 60 yuan/ton under the guidance of BMK, NORLISK and other brands. However, the downstream panic over the high market prices caused market participants to take a wait-and-see attitude, and it was difficult for the holders to exchange goods for spot.
Viewpoint: On the macro front, the US consumer inflation expectations recently released by the New York Federal Reserve show that the one-year inflation expectations in September reached 5.31%, a new high since the launch of the consumer expectations survey in 2013. In September, three-year inflation expectations rose to 4.19%, a record high. Yesterday, Fed executives expressed their opinions intensively, believing that the reduction conditions have almost been met, and that inflation is by no means "temporary." Among them, St. Louis Federal Reserve Chairman Brad expressed his support for the beginning of debt reduction in November. Fundamentally, according to SMM news, SMM 1# Copper Cathode production in September was 802,900 tons, a decrease of 2.0% from the previous month and a year-on-year increase of 0.4%. Due to the continuous impact of maintenance and power curtailment, the domestic SMM 1# Copper Cathode output is expected to be 803,000 tons in October, which will be flat on a month-on-month basis.
On the whole, the downstream operating rate fell short of expectations, and premiums and discounts fell sharply. Unilaterally, we maintain the judgment that the market will maintain wide fluctuations and there are downside risks.
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: Yisheng Dahua resumed work, and PTA processing fees dropped.
Balance sheet outlook: PTA is still expected to accumulate inventory from October to November under the background of implementation of overhaul; the Asian PX balance sheet is expected to continue to accumulate inventory slightly from October to November.
(1) Unilateral: Processing fees have rebounded, and it is recommended to take a wait-and-see attitude;
(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