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### Daily morning for Crude oil, PTA, natural rubber, iron ore, copper Iro (ZH & EN) 2021.11.11

submitted 2021-11-11 10:53:32

Iron Ore: The steel plant has increased overhaul and the iron ore is under pressure.

Logic and perspective:

The main iron ore contract opened lower at night. It continued to fall in the morning, hitting 518.5 yuan/ton, a record low since February 2019. It rebounded slightly in the afternoon, and finally closed down 4.62% to 536.5 yuan/ton. In terms of spot, the port spot price of imported iron ore kept falling in the afternoon, with a cumulative decline of 5-55 yuan/WT throughout the day. Qingdao Port PB fines reported 600-610 yuan/ WT, and SSF 375-380 yuan/ WT.

On the supply side, the total inventory of 45 ports this Monday was 14.9263 million tons, and last Monday figure was 146,496,300 tons. This week's port inventory increased by 2.767 million tons from the previous month. In terms of sub-regions, port inventories in all districts have increased. On the demand side, according to Mesteel's incomplete statistics, 28 steel mills across the country issued maintenance plans in November, including 10 sample steel mills in Shanxi. There are 2 steel plants in Zhejiang for maintenance and 16 steel plants in other regions. The increase in overhauls of steel plants has put pressure on iron ore demand. Downstream, the data released by Ganggu.com today showed that the national building materials production decreased by 95,500 tons this week, the hot coil production increased by 23,000 tons, and the steel output decreased overall.

On the whole, the expected increase in the supply of iron ore in the short and medium term remains unchanged, and the demand side remains weak. In addition, after the sharp drop in steel prices, the profit of steel mills has been severely compressed and the drive for restocking in winter is weak, making it difficult to change the pattern of loose supply and demand in the medium term. It is expected that the market will remain volatile in the short term. The recent decline has been too large, and it is recommended to wait and see strategically.

Strategies:

Unilateral: tend to be bearish in the medium term

Arbitrage: None

Spot-Futures Arbitrage: None

Options: None

Inter-period: None

Cross-species: None

Concerns and risks:

1. The implementation strength and scope of the crude steel production restriction policy.

2. Risk of rising sea freight, etc.

Rubber: The price of raw materials went up and down.

On November 10, the most-active RU contract closed at 14,080 (+155) yuan/ton, the price of mixed rubber reported 12,500 (+100) yuan/ton, and the basis of most-active contract stood at -1005 yuan/ton (-255); the open interest of top 20 actively traded long positions was 69,888 (-1,300) lots, the short position was 92,894 (-6,735) lots, and the net short position was 23,006 (-5,435) lots.

On November 10, the most-active NR contract closed at 11,075 (-10) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,735 (+25) US dollars/ton, the SMR stood at 1,725 (+15) US dollars/ton, and the SIR figure was 1,680 (+5) US dollars/ton. The basis of most-active contract reported -332 (+50) yuan/ton.

As of November 5: the total inventory of domestic exchanges was 297,456 (+12,243) tons, and the amount of warehouse receipts of exchanges was 242,250 (+21,930) tons.

Raw materials: Sheet rubber 52.67 (+0.17), cup lump 47.45 (-0.1), latex 51.8 (-0.5), RSS3 55.95 (+0.07).

As of November 4, the operating rate of domestic all-steel tire factories was 61% (+2.57%), and the operating rate of semi-steel tire factories was 56.48% (+1.61%).

Opinion: Yesterday, the price of rubber futures fluctuated at high levels, but the performance of NR was relatively weak, which may be mainly related to the recovery of overseas production in the later period and the gradual decrease of domestic production. Affected by the supply side, RU is expected to strengthen relative to NR without major fluctuations in demand in the later period. At present, the light-colored rubber represented by RU, due to the gradual decrease in the later stage of supply, the accumulation of inventory is expected to slow down, and the negative factors has been released. With the support of domestic raw material prices, the downward space is expected to be limited. The dark rubber represented by NR is under pressure due to the gradual increase in supply in the later period. However, due to logistics has not yet been fully relieved, domestic supply pressure is expected to be limited. The rubber price is expected to stabilize at this position, but the upper space is also limited. Investors are advised to be cautiously bullish in the short term, and the focus in the future is still on the supply side.

Strategy: Cautiously bullish

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

Crude oil: Cushing inventories remained low, while refined oil inventories declined.

Yesterday EIA announced weekly data. Among them, crude oil inventories increased but the growth rate was less than expected, refined oil inventories fell sharply, and Cushing's inventory remained low. We mentioned in the previous daily report that although Cushing’s inventory was historically low, the closing of Cushing’s arbitrage window to the U.S. Gulf and the cut in the pipeline rate of the Centurion pipeline are expected to restrict the net outflow rate of Cushing crude oil. Recently, Cushing's inter-month spread structure has fallen from a high level. From the perspective of regional inventory, although the Cushing area inventory is low, the U.S. Gulf area inventory is still relatively abundant, and the probability of Cushing’s inventory reaching the true bottom of the tank is still relatively low. If the Biden government releases strategic reserve stocks in the future, it will further improve the fundamentals of crude oil supply and demand in the US Gulf region. It is expected that there is not much room for Cushing's inventory to continue to decline.

Strategy: Neutral, go long of diesel crack spread (Gasoil-Brent

Risk: The United States releases strategic reserves.

Copper: Inflation expectations have soared, and copper prices have temporarily stabilized.

View:

On the macro front, the US CPI report released on Wednesday showed that consumer prices rose the fastest since 1990 in October. The important thing is that the owner's equivalent rent continues to rise, indicating that the Fed is facing sticky inflation. This may to a certain extent negate the previous statement that Fed Chairman Powell emphasized that inflation is temporary. And Senate Manchin also stated that the threat posed by record inflation is not "temporary" and the "economic loss" caused by inflation cannot be ignored. Higher inflation expectations may be relatively beneficial for copper products with relatively strong financial attributes.

Domestically, due to the large-scale cold wave weather in recent days, rainfall or snowfall has occurred in many parts of China, and coal production and transportation have been affected to varying degrees. However, the National Development and Reform Commission recently made another move, showing a firm regulatory stance. The National Development and Reform Commission recently instructed Shanxi Province to issue a price-limiting order for the second time in nearly half a month.

On the whole, coal prices have adjusted back again, affecting the overall sector prices. Unilaterally, we maintain the judgment that the market will fluctuate widely and there are downside risks.

Strategies:

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: Processing fees fluctuated and rebounded.

1. PX processing fees continue to be low.

(1) The production load has been reduced to 20% on November 8, and it is planned to start maintenance for 2 months on November 10.

(2) On October 25, Rongsheng issued an announcement that the Ministry of Commerce agreed to arrange the import allowance of 12 million tons of crude oil for non-state-owned trade in the second phase of the Zhejiang Petrochemical Co., Ltd. Refining and Chemical Project in 2021. On November 1, the two PX lines of Zhejiang Petrochemical have been upgraded to full capacity, the supply of PX has gradually recovered, and the subsequent third production line is expected to increase the load, and the PX processing fee has been reduced to a low level on the left.

2. PTA processing fees fluctuated and rebounded.

(1) Hengli 3# 2.2 million tons of Hengli Petrochemical will be overhauled from November 5 to November 25.

(2) PTA processing fees fluctuated in the range of 500-570.

3. The production and sales of filaments fell..

(1) The production and sales of filament yarn fell back to 35%.

(2) In October 2021, textile and apparel exports were 28.937 billion U.S. dollars, an increase of 16.47%. Among them, textile exports were US$12.5 billion, an increase of 7.19%; clothing exports were US$16.437 billion, an increase of 24.68%.

Balance sheet outlook: PTA will gradually enter the inventory accumulation cycle from November to December.

Strategic recommendations:

(1) Unilateral: PTA and PX processing fees are basically compressed in place, and the correction of crude oil benchmarks is expected to be limited. It is recommended that on unilateral prices, taking a wait-and-see attitude.

(2) Intertemporal: For the 1-5 spread, adopt a reverse arbitrage strategy.

Risks: PTA factory's control over the maintenance rhythm; the load situation of Zhejiang Petrochemical PX; the maintenance time of polyester reduced load.

10号，RU主力收盘14080+155）元/吨，混合胶报价12500/吨（+100），主力合约基差-1005/吨（-255）；前二十主力多头持仓69888-1300），空头持仓92894-6735），净空持仓23006-5435）。

10号，NR主力收盘价11075-10）元/吨，青岛保税区泰国标胶1735+25）美元/吨，马来西亚标胶1725美元/吨（+15），印尼标胶1680+5）美元/吨。主力合约基差-332+50）元/吨。

1. 单边：中性 2. 跨市：暂缓 3. 跨期：暂缓；4. 期权：暂缓

1. 美联储货币政策导向 2.美元指数走势 3.政策风险加剧

PTA：加工费震荡反弹

1）福建联合11.8降负至2成，计划11.10检修2个月。（21025日荣盛发公告，商务部同意安排浙江石油化工有限公司炼化二期项目2021年原油非国营贸易进口允许量1200万吨。111日，浙石化PX两条线已提升负荷，PX供应量逐步回升，后续第三条线亦有提负预期，PX加工费已左侧压至低位。

1PTA加工费500-570区间震荡。（2）恒力3#220万吨恒力石化11.5-11.25兑现检修

1）长丝产销回落至35%。（2202110月纺织服装出口289.37亿美元，增长16.47%；其中纺织品出口125亿美元，增长7.19%；服装出口164.37亿美元，增长24.68%