Iron Ore: Spot transactions increased, and prices were weak.
Viewpoint and logic:
Yesterday, the iron ore 2205 contract lightened 2 thousand lots to close at 663 yuan/ton, down 13 yuan/ton, or 1.92%. The price of imported iron ore in Qingdao Port fell 5-17 yuan/ton throughout the day; PB fines reported 768 yuan/ton, down 17 yuan/ton; SSF reported 468 yuan/ton, down 7 yuan/ton; the spread between high and low-grade products was 300 yuan/ Ton. Yesterday, the port traded a total of 1.27 million tons, a month-on-month increase of 28.9%. As the price of iron ore fluctuates downward, traders are more active, and steel mills purchase on demand. The forward market transactions were active yesterday, and the overall transactions rebounded from the previous day.
On the whole, the delivery of overseas mines on the supply side is loose, and the national molten iron output continues to maintain an ultra-low level. The iron ore port inventory began to fall from a high level, and the total iron element inventory continued to fall. The demand of steel mills for winter storage and restocking before the Spring Festival is stronger than the actual production resumption demand of steel mills in December. Due to the recent restocking of inventory and the expected resumption of production by steel mills in the future, and the long-term steel mills' immediate profits are still high, the expected restocking of iron ore still exists. However, the decline in consumption of thread and hot-rolled coil has become the focus of the market, and the short-term strategy tends to be neutral.
Spot-Futures Arbitrage: None
Concerns and risks:
1. Steel plant resumption of production and changes in profit
2. Iron ore shipment
Rubber: Pay attention to changes in the spread between futures and spot prices.
On December 29, the most-active RU contract closed at 14820 (+75) yuan/ton, the price of mixed rubber reported 13025 (+50) yuan/ton, and the basis of most-active contract stood at -1120 yuan/ton (-25); the open interest of top 20 actively traded long positions was 104585 (+1335) lots, the short position was 155089 (+2503) lots, and the net short position was 50504 (+1168) lots.
On December 29, the most-active NR contract closed at 11575 (+30) yuan/ton, the STR in Qingdao Free Trade Zone reported 1,775 (+5) US dollars/ton, the SMR stood at 1,765 (+5) US dollars/ton, and the SIR figure was 1,795 (0) US dollars/ton. The basis of most-active contract reported -329 (-128) yuan/ton.
As of December 24: the total inventory of domestic exchanges was 228,055 (+6705) tons, and the amount of warehouse receipts of exchanges was 206,590 (+14360) tons.
Raw materials: Sheet rubber 53.22 (+0.42), cup lump 45.7 (+0.2), latex 48 (0), RSS3 56.8 (+0.25).
As of December 23, the operating rate of domestic all-steel tire factories was 63.86% (+0.86%), and the operating rate of semi-steel tire factories was 63.75% (-0.25%).
Opinion: The fundamentals of rubber have not changed much, and the current contradiction between supply and demand is not prominent. However, due to the impact of domestic shipping schedules, the small amount of domestic imported rubber arrivals has led to continued destocking of port inventories. The strong rubber price this week may mainly come from the support of this factor. At the same time, the repeated epidemics in Yunnan have affected the entry of index rubber, which is also a driving factor for the price rebound this week. With the normalization of epidemic prevention and control, the overall impact is expected to be limited. In the off-season of demand, the upward space of rubber prices is expected to be limited, so we maintain the judgment that prices will remain range-bound.
Strategy: Cautiously bullish
1. Epidemic recurring
2. The spread between futures and spot prices continues to widen
3. Weak demand
Crude oil: EIA crude oil and refined oil inventories fell.
Yesterday EIA announced inventory data, among which crude oil inventories and refined oil inventories continued to decline. The decline in crude oil inventories in December is seasonal, because in a year when oil prices are rising, refineries need to keep raw material inventories as low as possible before the end of the year based on inventory tax and accounting standards, so that the company's financial performance can perform better, thereby pushing up the company's stock price. The remuneration of factory executives is usually linked to the company's stock price. In terms of refined oil inventory, the main reason is that the consumer side is still healthy. Although the number of people infected with the new crown in the United States continues to increase, from the perspective of high-frequency data, such as the traffic congestion index and the number of people at airport security checks, they are still at a high level and have not been significantly affected. In addition, travel demand during the Christmas and New Year holidays also supported transportation consumption, and refined oil inventories remained relatively low.
Risk: Geopolitical risk in the Middle East
Copper: Risk sentiment and inflation expectations continue, and copper prices remain at the 70,000 mark.
On the macro side, the US November existing home contract sales index unexpectedly fell 2.2% month-on-month, which was far behind the 7.5% increase in the previous value. It was affected by high housing prices and low inventory. The US merchandise trade deficit hit a record high in November, and the trend for the whole year will set a new record. Due to the sharp increase in imports to the highest level, the larger trade deficit will drag the US GDP for the fifth consecutive quarter, but it also reflects strong consumer demand and business investment. In terms of energy, European natural gas fell for a six-day to three-week low, the longest consecutive decline in more than a year. Russian President Vladimir Putin said on Wednesday that the "Beixi-2" natural gas pipeline project connecting Russia and Germany is ready. As long as Europe approves, Russia has the capacity to increase natural gas exports. In terms of the epidemic, the spread of Ome Keron caused the number of newly diagnosed cases worldwide to exceed 1 million for the second consecutive day. The WHO claims that Mudelta and Omi Keron strains pose a "dual threat" to the global epidemic. However, investors currently generally believe that the Omi Keron variant may not impose strict restrictions on global business activities and population movements, boosting risk sentiment.
From a fundamental point of view, near the end of the year, the supply of Shanghai copper market is tight, and the willingness of holders to hold up prices has strengthened, and the premiums and discounts of Shanghai copper have risen. Guangdong's electrolytic copper inventories ended the two consecutive increases and fell again, and hit a recent low. However, at the end of the year, more traders have begun to settle, the overall trading has become more and more insipid, transactions are not good, and the premiums and discounts of South China Copper have fallen. As for copper scrap, the price of copper rebounded slightly, and the spread between refined copper and scrap fell below a reasonable range. In terms of import, the import window is closed, and LME0-3 continues the Back structure. In terms of inventory, LME destocks slightly, and SHFE accumulates inventory slightly.
Overall, the risk sentiment continues, and the copper price stays at the 70,000 mark. As crude oil prices continue to rise and push up inflation expectations, it is recommended to maintain a bargain-hunting attitude towards copper prices.
1. Unilateral: Cautiously bullish
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: PTA processing fees continue to be firm.
1. In terms of PX, the speed of increasing production load is still slow.
Under the background of low processing costs in the early stage, most of the Korean installations have reduced the production load to around 80%. India's OMPL restart is postponed. Hengli's 4.75 million tons of PX production capacity has been reduced by 15-20% on December 23, and the recovery time is yet to be determined. Zhejiang Petrochemical's PX 9 million tons production load is still 65% to 70%, and the speed of increasing the production load is still slow. Under the background of Zhejiang Petrochemical's under-full load, Asia's PX will slightly destock from January to February.
2. PTA processing fees continue to be firm.
(1) The PTA operating rate has returned to a short-term high, and Hengli’s progress in signing the long-term contract next year is still slow. If the signing is still not successful in January, the circulation of subsequent traders may be tightened. This may lead to a short-term strengthening of PTA processing fees.
Balance sheet outlook: It is expected that the inventory will be slightly destocked in December, but it will enter the seasonal accumulation of inventory in January.
(1) Unilateral: take a wait-and-see attitude. The PTA processing fee is relatively high in the short term, while the PX processing fee is still relatively low.
(2) Intertemporal: take a wait-and-see attitude.
Risks: The price of crude oil fluctuates sharply; PTA factory long-term contract signing progress; Zhejiang Petrochemical PX new plant production load increase progress; polyester plant joint production reduction progress.
1. 单边：谨慎看多 2. 跨市：内外反套 3. 跨期：暂缓；4. 期权：暂缓
1. 库存拐点 2.美元指数走势 3.疫情风险加剧