Iron Ore: The optimism dissipates and the market may face a correction again.
Viewpoint and logic:
The overall rise of the black series driven by bullish policy news early this week did not last long. Following the market correction on the 8th, the overall black series continued to fall on the 9th, generally exceeding 2.5%. The iron ore 2205 contract did not continue the 8th defensive trend, and the night trading dived 1.4% to start. In the afternoon session of the 9th, it once fell by more than 4.6%, with a minimum of 632 yuan/ton, and then stabilized and rebounded slightly. It finally closed at 642.5 yuan/ton, down 16 yuan/ton from yesterday, or 2.43%.
Iron ore arrivals from the supply side continued to rise, and inventories remained high. Although iron and steel companies currently have higher profits, due to the impact of restricted production, production capacity has not increased month-on-month, and iron ore inventories in steel mills are also accumulating.
On the demand side, according to the weekly steel data released by the Union of Steel, the amount of steel out of warehouses has increased month-on-month, and steel inventories have continued to decrease, but output has not increased accordingly, confirming the impact of the continuous production restrictions of steel mills in the north. The demand for construction steel in steel sales has improved significantly, indicating that due to the loose margins of real estate companies' financing, there are obvious signs of resumption of work and production at the beginning of construction projects. Affected by the statement made by the Political Bureau of the Central Committee to promote the healthy development and virtuous circle of the real estate industry, the real estate ETF rose by 1.74% on the 9th, and market confidence continued to be boosted. At present, iron ore is weakened in the short-term due to the impact of steel mills' production restrictions. But in the long run, considering the boosting of confidence in the real estate industry, after the relaxation of production restrictions, iron ore may continue to strengthen in the future.
Unilateral: Neutrally take a wait-and-see attitude
Spot-Futures Arbitrage: None
Concerns and risks:
1. Real estate related policies
2. Overseas mining plan
3. Limited production of steel mills
Rubber: Thailand latex prices continue to fall.
On December 9, the most-active RU contract closed at 14375 (-245) yuan/ton, the price of mixed rubber reported 12850 (-125) yuan/ton, and the basis of most-active contract stood at -1050 yuan/ton (-5); the open interest of top 20 actively traded long positions was 90073 (-1816) lots, the short position was 133846 (-1383) lots, and the net short position was 43773 (+433) lots.
On December 9, the most-active NR contract closed at 11175 (-125) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,745 (-10) US dollars/ton, the SMR stood at 1,735 (-10) US dollars/ton, and the SIR figure was 1,765 (0) US dollars/ton. The basis of most-active contract reported -158 (+30) yuan/ton.
As of December 4: the total inventory of domestic exchanges was 209283 (+20933) tons, and the amount of warehouse receipts of exchanges was 154530 (+14060) tons.
Raw materials: Sheet rubber 56.15 (0), cup lump 47.5 (-0.2), latex 52.5 (-2), RSS3 57.55 (-1.12).
As of December 3, the operating rate of domestic all-steel tire factories was 62.98% (-2.98%), and the operating rate of semi-steel tire factories was 62.17% (-0.08%).
Opinion: This week, due to the decrease in rainwater in the main producing areas of Thailand, the increase in raw material output has caused the price of latex to drop significantly. The price of latex in Thailand continued to fall yesterday, and the support for rubber costs was significantly loosened. On the demand side, due to the re-accumulation of finished goods inventory of domestic tire factories, weak demand will cause the raw material purchase demand of tire factories to decline. With weak supply and demand, prices continued to fall this week. The domestic production area in Yunnan has stopped delivery, and the output of raw materials is limited. According to the current domestic raw materials, the cost support of the market price is about 14,000 yuan/ton. The space below is expected to be limited.
1. Epidemic recurring
2. The spread between futures and spot prices continues to widen
3. Weak demand
Crude oil: The Iranian nuclear talks are once again at a deadlock.
The US-Iran talks were once again at an impasse, and Biden said to his team that he would prepare for Iran's diplomatic failure. For now, the US and Iran are still facing the game of "who takes the first step". The United States requires Iran to return to the Iran nuclear agreement first to reduce the number of uranium enrichers, and Iran requires the United States to lift its sanctions first. If the Iranian nuclear talks fail, this means that sanctions on Iran may continue until next year, and Iranian oil exports will remain sluggish. But for now, sanctions have a greater impact on Iran's economy. It is not ruled out that Iran will make concessions in the future, so the process of the US-Iran nuclear talks will be repeated. But as far as the current results are concerned, the medium-term outlook for oil prices is positive. Once Iranian oil cannot return to the market, it will significantly ease the oversupply and demand next year.
1. Geopolitical risk in the Middle East
2. The impact of the variant virus is less than expected.
Copper: The market transactions were insipid, and the premium and discount prices quotations continue to fall.
On the macro level, the National Bureau of Statistics released data yesterday. Mainly affected by the low base in the same period last year, in November, the national consumer price index (CPI) rose by 2.3% year-on-year, an increase of 0.8 percentage points from the previous month, and a month-on-month increase of 0.4%, and the increase was 0.3 percentage points lower than the previous month. Overseas, on the afternoon of Thursday (December 9) Eastern Time, the US Senate passed a bill to speed up raising the debt ceiling by a vote of 64 to 36, further reducing the risk of government shutdown.
From a fundamental point of view, at the mining end, the mining end has been more disrupted by the epidemic since last week. According to SMM research, important ports in northern China are still affected to varying degrees under the interference of the epidemic. Among them, Alashankou Port and Erlianhot Port have been greatly affected. Although Alashankou Port has not closed its ports, the speed of customs clearance has slowed significantly under the epidemic prevention and control, and a large number of copper concentrates and electrolytic copper are stranded at the ports. The Erlianhot port has completely suspended the import and access of non-container cargo from November 28, and the specific recovery time has not yet been determined. Ganqimaodu Port was closed for a week at the end of November. Although customs clearance is expected to resume on December 3, it is expected that the speed of customs clearance and shipment will hardly pick up significantly in the short term. Generally speaking, since the fourth quarter of this year, the import volume of northern China ports has been significantly affected by the interference of epidemic prevention and control. China’s imports from Kazakhstan in October fell by 87.52% year-on-year to only 13,200 physical tons. Affected by this, the TC of copper concentrate import processing fee showed a slight decline in the fourth quarter. In addition, we need to pay attention to the general election situation in Chile at the end of the month. On the smelting side, the wave of electricity curtailments across the country basically ended in November. The copper output that month was 825,900 tons, an increase of 4.6% month-on-month and 0.5% year-on-year. However, mine-side interference and the decline in sulfuric acid prices inhibited the enthusiasm of smelters to produce, making it difficult for the electrolytic copper output in November to return to the high level in the second quarter. In terms of terminal consumption, the final value of the PMI composite index of the copper downstream industry in November was 51.11, an increase of 0.74 percentage points from the previous month. In November, stimulated by the end of wide-scale staggered electricity consumption across the country, coupled with the country's slight relaxation of the real estate market, all walks of life benefited slightly, and the comprehensive PMI increased. In terms of breakdown, the production index rose by 1.07 percentage points to 51.59, and the new order index rose by 0.8 percentage points to 50.97. The abolition of power restrictions, coupled with the fact that raw material prices have remained low for most of November, has stimulated many companies to actively produce to catch up with orders. In terms of copper scrap, the price of copper declined this week, which led to the weakening of the price difference between refined copper and copper scrap, from above the reasonable range to below the reasonable range. The consumption support of scrap copper for refined copper has reappeared from the data point of view.
In general, the disturbance at the mine end has increased. Major ports in northern China were still affected to varying degrees under the interference of the epidemic, and the TC index declined significantly in November. On the smelting end, the nationwide power rationing has basically ended. However, due to the interference from the mine and the decline in the price of sulfuric acid, the smelter's production enthusiasm was inhibited, and the output of electrolytic copper in November was difficult to return to the high level in the second quarter. As for copper scrap, the price of copper fell, which led to the weakening of the spread between refined copper and copper scrap and fell below a reasonable range. Scrap copper's consumption support for refined copper has once again appeared. On the consumer side, it shows a better trend in the off-season. The end of power rationing and the marginal improvement in real estate led to an increase in the PMI of the copper industry in November. Therefore, affected by these multiple factors, copper prices remain volatile for the time being.
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. The risk of the epidemic may increase.
PTA: Under the impact of the East China epidemic, PTA factories are expected to reduce production load and implement maintenance.
1. After Zhejiang Petrochemical's new plant was put into production, the total load increase was still slow.
(1) The total operating rate of the 9 million tons of Zhejiang Petrochemical PX equipment is only around 65%, and the progress of increasing the load is still slow. The PX processing fee in the early stage has been compressed to a low level on the left side, and is currently consolidating at the bottom.
(2) Zhenhai Petrochemical is currently operating normally, paying attention to potential future impacts.
2. The Zhenhai epidemic has caused Yisheng New Materials to reduce production load expectations.
(1) Due to the epidemic, Zhenhai District has temporarily implemented closed management, and logistics has been affected at present. The 3.6 million tons of Yisheng New Materials plant reduced the production load to 40-50%, and there are expectations for further reduction of the production load and implementation of maintenance.
3. The East China epidemic further affects polyester factories.
(1) Xiaoshao Polyester Factory requires all loading drivers to provide the itinerary code or carry a 48-hour accounting test report before entering the factory for loading. Under the background of filament inventory pressure, we are concerned about the possibility of adjusting the production load of polyester factories in the future.
Balance sheet outlook: Under the expectation of concentrated production cuts in polyester factories and the full implementation of PTA plant overhauls, inventories were accumulated slightly or flattened in December, but the room for further compression of PTA processing fees is also limited. The current absolute price drive comes from crude oil price fluctuations.
(1) Unilateral: take a wait-and-see attitude; At present, PTA processing fees have rebounded to a short-term high, with limited space below. PX Zhejiang Petrochemical's new production capacity has also suppressed processing fees to a low level.
(2) Intertemporal: take a wait-and-see attitude.
Risks: The price of crude oil fluctuates sharply; PTA plant maintenance progress; Zhejiang Petrochemical PX new plant production load increase progress; polyester plant joint production reduction progress.
1. 单边：中性 2. 跨市：内外反套 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.疫情风险加剧