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### Daily morning for Crude oil, PTA, natural rubber, iron ore, copper Iro (ZH & EN) 2022.01.04

submitted 2022-01-04 10:08:23

Iron Ore: The supply guarantee policy has become warmer, and the iron ore fluctuates at a high level.

Since December, the iron ore 05 contract rebounded from a monthly low of 612 yuan/ton to 717 and then fell to close at 680 yuan/ton, an increase of about 140 points from the lowest point in December. Recently, the iron ore market as a whole shows a trend of strong volatility. Entering the fourth quarter, as the national annual crude steel reduction task is expected to be completed by the end of December, it is expected that steel mills will gradually resume production from the end of December to January, and the resumption of production of steel mills is expected to boost iron ore prices. In terms of spot, as of December 31, the Mysteel 62% iron ore forward spot price index was US$119.65/DT, an increase of US$19.65/DT from the beginning of the month.

On the supply side, the total global shipments this period totaled 34.66 million tons, an increase of 3.18 million tons from the same period in November. Among them, the shipment volume from Australia increased by 1.73 million tons to 19.56 million tons; the shipment volume from Brazil increased by 520,000 tons to 7.46 million tons; non-mainstream shipments amounted to 7.11 million tons, an increase of 920,000 tons month-on-month. The monthly supply rebounded to a high level in the same period in history, and the supply was loose.

On the demand side, due to the implementation of the national crude steel production reduction policy, the blast furnace operating rate and discounted output in December were at an absolute low level, a sharp drop year-on-year. As of December 31, Mysteel surveyed 247 steel mills with a blast furnace operating rate of 70.04%, a decrease of 16.03% year-on-year. The utilization rate of blast furnace ironmaking capacity was 75.79%, a year-on-year decrease of 16.29%. The profit rate of steel mills was 86.15%, a year-on-year decrease of 4.33%. The average daily molten iron output was 2.0301 million tons, a year-on-year decrease of 420,900 tons. Due to the improvement in steel consumption month-on-month and high profits, there is a strong tolerance for raw materials. As the Spring Festival approaches, steel mills will still carry out a certain scale of restocking.

On the inventory side, the total amount of imported iron ore at ports in December rebounded from the previous month. As of December 31, Mysteel counted 156.257 million tons of imported iron ore in 45 ports across the country, an increase of 1.131 million tons from the previous month. The number of ships in port increased by 17 to 159. Inventory has reached a high level in the same period in recent years, and it is expected that iron ore will continue to maintain a high inventory status in recent years.

On the whole, the national crude steel production limit was basically completed in December. At the same time, the Central Economic Work Conference requires all regions and departments to take the responsibility of stabilizing the macro economy and actively introduce policies conducive to economic stability. It is expected that subsequent production restrictions will become more moderate. 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.

Strategies:

Unilateral: Neutral

Arbitrage: None

Spot-Futures Arbitrage: None

Options: None

Inter-period: None

Cross-species: None

Concerns and risks: The implementation strength and extent of the crude steel production restriction policy, the risk of rising ocean freight, etc.

Rubber: The turning point of domestic accumulation of stocks may continue to be delayed.

From the supply side, due to the complete delivery shutdown of domestic production, the increase in supply mainly depends on imports, and the impact of delays in shipping schedules in Southeast Asia is expected to continue. Therefore, the increase in domestic supply in January was limited. For overseas supply, we need to pay attention to the weather and rainfall in the main producing areas. If there is no obvious abnormal weather, Thailand's main producing areas will continue to increase production. The risk points on the supply side also mainly focus on the mitigation time of domestic port transportation. Once the transportation is significantly eased, it will bring about the possibility of a large number of imports impacting domestic supply.

The demand in January may be basically the same as the previous month. If it is optimistically expected, the demand will show an improvement from the previous month. At the same time, we need to pay attention to the stocking demand of domestic downstream tire factories before the Spring Festival holiday. What is special this year is that the Winter Olympics are also held during the Spring Festival, so the factory needs to increase production in advance, which may all become a phased increase in January demand.

The main domestic production areas have entered a period of delivery shutdown, and the rainwater will gradually decrease because the southern part of Thailand is still in the peak season for rubber delivery overseas. With high-priced raw materials, the supply is still expected to be released, but the growth rate will slow down seasonally. At present, domestic supply is mainly concerned with arrivals at ports. It is expected that the shipping schedule in Southeast Asia in January will not be significantly eased, and domestic supply pressure will increase or be more limited. However, due to the weak domestic economy and slow recovery of overseas demand, there are generally no bright spots in demand. However, the small peak of domestic terminal sales at the end of the year and the early production before the Spring Festival holiday may allow the tire factory to maintain its operating rate. However, under the high inventory of tire factories, the recovery of operating rate is expected to be limited until the terminal does not substantially improve. Therefore, demand may still be stable in January, and the price contradiction is still on the supply side. We believe that before the accumulation of inventory in domestic ports, prices are expected to remain fluctuating at high levels. It is recommended to maintain the idea of buying at low levels.

Strategy: Cautiously bullish

Risks:

1. Inventory rebounds sharply

2. Increased supply in production areas

3. Demand continues to show weakness

Crude oil: Omi Keron has limited short-term impact, and pressure on oil prices still exists.

The strong oil price trend before the New Year's Day in 2022 is mainly due to the sharp easing of demand concerns about the Omi Keron epidemic. First, although the virus is highly contagious, it is mainly mild. The number of hospitalizations in various countries has not increased significantly with the soaring number of infections. The second is that a number of specific drugs have been approved. Several specific drugs currently announced are effective for the treatment of variant viruses such as Omi Keron and Delta.

But there is still a ceiling above oil prices. Since the US government has previously clarified the upper limit of the tolerance for inflation, it is still possible to accelerate the pace of releasing reserves or increase reserves release after the oil price reaches 80 US dollars per barrel, or adopt other policy measures to suppress oil prices. On the other hand, from the perspective of crude oil's own fundamentals, with the arrival of the traditional off-season of refinery spring inspections, we believe that the first quarter of this year may be the turning point of the oil market from destocking to accumulating inventory. Based on the current epidemic situation, it is unlikely that OPEC will stop increasing production or reduce production again, and a moderate increase in production is still the main theme. Therefore, even in the absence of Iranian oil, the contradiction between global oil supply and demand will be significantly eased in 2022. US$80/barrel is the upper limit of inflation tolerance for major consumer countries, while the oil price of US$60 barrels is the lower limit of oil prices required for the fiscal balance of major oil-producing countries such as OPEC. This means that in the absence of a black swan event, oil prices will fluctuate in the range of 60 to 80 US dollars per barrel in 2022, which also means that the margin of safety for continuing to go long at the current price level is not high. We believe that more consideration needs to be given to seizing opportunities for going short positions at high levels when inventory turning points appear in the future.

Strategy: Neutral in the short term; Oil prices are currently at the upper edge of the range, investors can go short positions in the medium term

Risk: Geopolitical risk in the Middle East

Copper: The supply and demand side is relatively weak, but the feedback of inflation expectations to copper prices is positive.

Core logic:

1. At the macro level, the Federal Reserve's interest rate resolution in December announced that it will speed up its reduction in debt purchases, and the dot matrix chart shows that the number of interest rate hikes in 2022 may reach 3 times. However, from the perspective of market reaction, the dollar and even U.S. Treasury yields have not seen a significant rebound, especially the long-end U.S. Treasury yields remain unchanged, which still shows the market's concerns about the future economic outlook. In addition, the risk of energy shortages that broke out again in mid-to-late December has also exacerbated market concerns about stagflation. Coupled with the strengthening of crude oil prices in late December, from the perspective of inflation expectations, the feedback on copper prices is relatively positive.

2. On the supply side, TC prices fluctuated between US$60/ton and US$62/ton in December. The TC benchmark price in 2022 is negotiated at US$65/ton, which is higher than the US$59.5/ton in 2021, indicating that the mine supply in 2022 has relatively loose expectations. However, the interference of high freight rates, the epidemic and the closure of mining areas that may be caused by strikes will still be large uncertain factors in January and even through 2022.

3. On the smelting side, the price of TC basically stabilized in December, while the price of sulfuric acid continued to fall. This may make smelting profits also fall, but it is still not in a state of loss-making production. And the impact of the previous restrictions on production and electricity has been significantly improved between October and November. At present, we need to pay attention to whether there will be a double control of energy consumption again with the arrival of the Winter Olympics and the cold winter. And if the impact of this situation is not significant, then the future production supply may also have a loose trend on the smelting side. However, due to the relatively early Spring Festival in the lunar calendar, the production of refined copper in January may be affected to a certain extent.

4. In terms of import and export, from November until late December, the import profit window was opened from time to time, and the maximum could reach 800 yuan/ton. Therefore, the import volume of refined copper also showed a certain rebound in November. With regard to scrap copper, the situation is relatively similar. Although Malaysia's import tightening policy has been postponed until 2022. This policy has extensive influence on local recycling companies. However, according to market feedback, even if Malaysia has tightened its scrap metal import policy, there is a possibility of unblocking customs declarations. Industry insiders temporarily discounted the strictness of the policy.

5. On the demand side, in December, the one-year LPR was lowered, and the previous real estate policies seemed to show signs of picking up. However, the real estate sector is actually more related to the five-year LPR, so the future performance of the real estate sector is still more disturbing in the market. Coupled with the influence of the Spring Festival factor, it is still difficult to find bright spots in the consumption of traditional sectors such as domestic real estate and infrastructure in January 2022, and the replacement function of new energy for copper demand is a relatively medium- to long-term topic. Therefore, in the short term, the demand for copper varieties is temporarily difficult to form an effective support. However, looking at the whole year of 2022, after all, the previous Central Economic Work Conference revealed the attitude of maintaining the real estate market, so the possibility of a gradual recovery of demand after the first quarter is relatively high.

Strategies:

1. Unilateral: Cautiously bullish

2. Inter-market: postpone

3. Inter-period: postpone

4. Options: sell a put option

Focus point: Inflection point of inventory; whether there will be an unexpected reversal in the monetary policy of the world's major economies.

PTA: PTA circulation inventory is tightened, and processing fees are 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.

3. The terminal production load is still low, but the progress of the filament production reduction is not as good as expected.

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.

Strategic recommendations:

(1) Unilateral: Cautiously bullish. 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.

12月份以来，铁矿05合约从月内低点612/吨先反弹到717后下跌收于680/吨，从12月的最低点涨了140个点左右，近期整体呈现偏强震荡趋势。进入四季度，随着12月底有望完成全国年度粗钢压减任务，预计12月底至1月份钢厂将逐步复产，钢厂复产预期有望提振铁矿价格。现货方面，截止1231日，Mysteel62%铁矿石远期现货价格指数119.65美元/干吨，环比月初上涨19.65美元/干吨。

1月份的需求，或与前一个月基本持平，乐观点预计则环比呈现改善，同时需要关注的是国内下游轮胎厂在春节假期之前的备货需求，今年比较特殊的是冬奥会也在春节期间举行，因此工厂有提前加大生产的需要，或都成为1月需求的阶段性增量。

2022年元旦节前油价走势偏强，主要原因是奥密克戎疫情对于需求担忧大幅缓和，一是病毒虽然传染性较强，但以轻症为主，各国住院人数并未随着感染人数飙升而显著增加；二是多只特效药获批，当前公布的几种特效药对于治疗变种病毒如奥密克戎和Delta均有效，有望打破疫情升级防疫升级、防疫放松疫情升级的循环。

1、宏观层面，12月美联储利率决议宣布加快其缩减购债速度，并且点阵图中显示2022年加息次数或达到3次。但是从市场反应来看，美元乃至美债收益率均未出现明显的回升，尤其是长端美债收益率的“无动于衷”，仍然显示出了市场对于未来经济展望的担忧。此外12月中下旬所再度爆出的能源紧俏的风险也加剧了市场对于滞胀出现的顾虑，叠加原油价格在12月下旬的走强，从通胀预期的角度而言，对铜价的反馈相对正向。

2、供应端，12月间TC价格于60美元/吨至62美元/吨附近徘徊，2022TC benchmark价格被谈订为65美元/吨，高于2021年的59.5美元/吨，显示出2022年矿端供应有着相对趋宽的预期，不过运费的高企、疫情以及罢工所可能导致的矿区关停等因素的干扰在1月乃至整个2022年间仍将会是较大的不确定性因素。

3、冶炼端，12月间TC价格基本维稳，硫酸价格则是持续下跌，这或许使得冶炼利润同样出现回落，但仍不至处于亏损生产的状态之中，并且此前限产限电的影响在1011月间已经出现了明显的好转，目前需要关注的是随着冬奥会以及寒冬的来临，是否将会再度出现能耗双控的情况，而倘若这样的情况影响并不显著，则就冶炼端而言未来产量供应或同样有偏宽的趋势。但由于农历壬寅年春节相对较早，故此1月间精铜产量或会受到一定影响。

4、进出口方面，11月间直至12月下旬，进口盈利窗口不时开启，且最高可达800/吨，故此11月间精铜进口量也呈现了一定的回升。在废铜方面，情况相对类似。虽然马来西亚方面进口收紧政策推迟到2022年实施。该政策对当地的回收企业影响广泛，不过据市场反馈，即使马来西亚收紧了废金属进口政策，但在报关方面存在疏通的可能，业内人士暂时对该政策的严格程度打了一定折扣。

5、需求端，12月间，一年期LPR调降，并且此前地产方面的政策似略有回暖的迹象。不过由于真正与房地产较为相关的实为五年期LPR，因此房地产板块未来的表现仍另市场较为不安。叠加春节因素的影响，20221月国内地产、基建等传统板块的消费仍难寻亮点，而新能源对于铜需求的替代功能则是一个相对偏中长期的话题，因此短期内来看，需求对于铜品种而言暂时难以形成有效的支撑。但纵观2022年全年，毕竟在此前的中央经济工作会议中透露了维稳房地产市场的态度，故此1季度后需求逐渐恢复的可能性也相对较大。

PTAPTA流通库存收紧，加工费坚挺

1PTA开工率已恢复至短期高位，恒力下年长约签订进度仍慢，若1月仍未顺利签订，或后续贸易商环节的流通量或有所收紧，导致PTA加工费仍持续坚挺。