Iron Ore: In the short term, long and short strategies are intertwined, and the pre-holiday strategy is mainly based on hedging.
Last week, southeastern Brazil was hit by heavy rains and Vale suspended some iron ore production, and the market sentiment continued to warm. However, as domestic demand is still weak, port inventories are still increasing. As of Friday night trading, the 05 contract closed at 710.5 points, down 6.5 points (-0.91%) from the previous week. In terms of spot, the lowest spot price of PB fines in the main four ports is 825 yuan/ton, unchanged from last week; SSF is 520 yuan/ton, up 2 yuan/ton from last week. The average weekly turnover of iron ore in the main port was 1.0896 million tons/day, down 75,000 tons/day from the previous week.
In terms of supply, the global iron ore shipments totaled 26.954 million tons, a decrease of 7.711 million tons from the previous month. The total iron ore shipments from 19 ports in Australia and Brazil were 22.354 million tons, a decrease of 560.50 tons from the previous month. Australia shipped 17.147 million tons, a decrease of 4.070 million tons from the previous month. Among them, Australia sent 14.006 million tons to China, a decrease of 3.646 million tons from the previous month. Brazil shipped 5.2070 million tons, down 1.535 million tons from the previous month. The total amount of arrivals at China's 45 ports was 25.625 million tons, an increase of 653,000 tons from the previous month. The total amount of arrivals from at six northern ports was 12.131 million tons, a decrease of 724,000 tons from the previous month. After the policy continued to ease, the financing of real estate companies and the issuance of housing loans showed signs of marginal improvement, resulting in a slight improvement in iron ore. Affected by the weather, the shipments and arrivals of short-term iron ore decreased month-on-month.
In terms of demand, Mysteel surveyed 247 steel mills with a blast furnace operating rate of 75.77%, an increase of 1.56% from last week and a decrease of 13.62% from last year. The utilization rate of blast furnace ironmaking capacity was 79.89%, an increase of 2.01% month-on-month and a year-on-year decrease of 11.74%. The profit rate of steel mills was 83.12%, down 0.00% month-on-month and 4.33% year-on-year. The average daily production of molten iron was 2.1369 million tons, an increase of 51,800 tons from the previous month and a decrease of 301,700 tons from the same period last year. With the completion of the national crude steel pressing production task in 2021, the resumption of blast furnace production has gradually picked up since the end of December, and it is expected that the production of molten iron will continue to increase in the near future.
Taken together, shipments from Australia and Brazil have seen very significant reductions this week. Although iron ore is still in a state of high inventory, and steel is still limited by the Winter Olympics in the first quarter, the output is expected to continue to increase after the completion of the national crude steel policy, which will then be transmitted to the mine. The latest increase in the production of molten iron from steel mills shows that the resumption of production is being implemented substantially, and the increase in demand has formed a certain support for iron ore prices. At the same time, since the current steel output is still at a low level in the same period, the changes in iron ore inventories in the later period are more determined by the intensity of steel consumption and the degree of production increase. At present, macro expectations have turned warmer and consumption trends are improving. At the same time, the immediate profit of long-process steel mills is now affected by the price increase at the coke end, and the overall profit has shrunk. Considering that the Spring Festival holiday is approaching, the restocking of steel mills before the holiday is expected to be gradually completed. At present, the port inventory continues to be high, coupled with the recent disturbance of the epidemic, it is recommended to take a wait and see attitude in the near future.
Spot-Futures Arbitrage: None
Concerns and risks: The implementation strength and extent of the crude steel production restriction policy, the risk of rising ocean freight, etc.
Rubber: Downstream purchases have cooled, and port inventory depletion has slowed.
Last week, the price of rubber continued to fluctuate. Affected by the surrounding market sentiment, market volatility is still relatively large. As the domestic holiday approaches, downstream rigid demand purchases have slowed down. However, the increase in arrivals is still not obvious, resulting in a slowdown in the destocking of domestic ports. However, the higher raw material prices and the expected improvement in domestic demand after the year will still support the market.
As of January 14, the total inventory of domestic exchanges was 239,925 tons (+5125), and the amount of futures warehouse receipts was 219,910 tons (+4400). The price premium structure of the futures market has brought about a continuous increase in warehouse receipts and inventories on the exchanges. However, the main production areas in China have completely stopped delivery, and it is difficult for the increase in warehouse receipts to continue to pick up. As of January 9, the inventory in Qingdao Free Trade Zone continued to decline, but the decline slowed down, mainly due to the reduction in downstream purchasing demand. Due to the issue of shipping schedule, the number of arrivals has not changed much. The market expects that the accumulation of inventories at ports may be after the Spring Festival holiday.
In terms of the operating rate of downstream tires, as of January 13, the operating rate of all-steel tire enterprises was 59.01% (+6.98%), and the operating rate of semi-steel tire enterprises was 59.36% (-0.69%). As the Spring Festival holiday is approaching, the recovery of the tire factory operating rate is limited, and the tire factory operating rate may gradually decline in the later period.
Opinion: Falling leaves in northeastern Thailand lead to reduced latex supply. At the end of last week, the price of latex in Thailand rose significantly, and the support of the rubber cost side was strengthened. At present, domestic rubber is showing a weak pattern of supply and demand. The main domestic production areas have been completely stopped delivery, and the supply mainly depends on imports. Due to the impact of the epidemic, domestic imports of rubber have been repeatedly delayed. Even with the cooling of domestic downstream purchasing demand, it is expected that the domestic Qingdao port inventory accumulation will be relatively limited. Domestic supply pressure is more difficult to show, and demand is in the off-season, but demand is still expected to improve after the year. Therefore, we believe that the price of rubber will fluctuate mainly before the Spring Festival, and the downside may be limited.
1. Significant increase in domestic supply
2. The impact of the epidemic and other influences makes demand continue to show weakness
3. Fund is tight.
Crude oil: Inflation expectations support stronger oil prices, but investors still need to be cautious.
Although there were bearish factors in the fundamentals last week, oil prices still maintained a strong trend. At the same time, the inter-month spread is also strong. We believe that the current crude oil market may be in a macro and inflation-led environment.
First of all, judging from the significantly bearish news, on the one hand, the supply disruptions of some oil-producing countries in the early stage have basically recovered. Oil field shutdowns in Libya, pipeline maintenance in Ecuador and force majeure in Nigeria have all ended, with supply disruptions involving more than 1 million bpd coming back online, but oil prices have not responded. On the other hand, the global Omicron epidemic situation is severe. Although most of the cases are mild, overseas countries are strictly tightening epidemic prevention measures, which has little impact on demand. However, as far as China is concerned, the recent epidemics in many places have significantly suppressed short-term demand and the demand for transportation to return to work during the Spring Festival, which also did not reflect the trend of oil prices.
From the point of view of bullish factors, the physical discount of light crude oil in the North Sea, West Africa and other places did soar last week, indicating that the current light crude oil is tight. However, from the perspective of ESPO discount and Brent Dubai EFS structure, Asia-Pacific buying interest has not increased significantly recently, and the increase in buying interest mainly comes from local refineries in Europe. On the one hand, the French Donges refinery (with a production capacity of 215,000 barrels per day) plans to resume production in March, so it is replenishing raw material cargoes recently. On the other hand, a sharp drop in natural gas prices has boosted production margins for simple and lightly hydrogenated refineries in Europe. The current shortage of light crude oil in the Atlantic Basin is structural and short-term. Through the arbitrage mechanism, Europe will easily attract light crude oil cargoes exported from the United States, while Asia will reduce the arbitrage cargoes in the North Sea and West Africa and purchase ESPO and light crude oil in Southeast Asia and other places. From the perspective of the global market, the current crude oil spot is not in short supply, and the shortage is only reflected in the North Sea light oil. While this is Brent's pricing plate, we believe this is a short-term fundamental factor.
Therefore, the fundamentals of crude oil itself are long and short intertwined in the near future, not one-way bullish. The reason why oil prices did not reflect the current significant negative, we believe that the current core driving factor is mainly from the impact of inflation. The current U.S. inflation expectations indicator has a strong correlation with oil prices. Macro hedge funds and allocation-based index funds based on inflation expectations may increase their long positions at this stage, thus forming a positive feedback loop between oil prices and inflation expectations. But it is uncertain how long the inflation trade will last amid expectations of faster monetary tightening by the Federal Reserve. And after the oil price reached $80/barrel, it once again hit the upper limit of inflation tolerance in developed countries such as the United States. In the future, it will not rule out the continued use of dumping reserves and other policy tools to suppress oil prices. OPEC will also face greater political pressure. In addition, the imported inflation brought by oil prices to developing countries cannot be ignored. The previous domestic riots in Kazakhstan were also triggered by the government's cancellation of domestic fuel subsidies, which led to soaring fuel prices. Inflation is not just an economic problem, it can also trigger a series of geopolitical events. We believe that this round of rising oil prices still needs to be treated with caution.
Strategy: tend to be neutrally bullish 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 accumulation of inventories is not very obvious, and copper prices may maintain a strong shock pattern.
According to SMM News, the average price of SMM1# electrolytic copper in the week of January 14 ran from 69,870 yuan / ton to 72,200 yuan / ton, showing a volatile weekly trend. The average premium and discount quotations run from -60 to +330 yuan / ton, showing a downward trend in the middle of the week. Copper prices rose first and then fell last week. The Shanghai Copper 2203 contract ran from a minimum of 69,100 yuan/ton to a maximum of 72,580 yuan/ton, and closed at 70,090 yuan/ton on Friday night.
In terms of inventories, LME inventories rose by 15,300 tons to 86,300 tons last week. Inventories on the Shanghai Futures Exchange rose by 1,100 tons to 30,300 tons. Social inventory was 289,300 tons (including bonded areas), down 0.6 million tons from the previous week.
Copper prices fell last week after hitting highs. The Fed's dovish remarks have temporarily eased concerns about tightening liquidity. Fundamentally, the TC index rose slightly, but due to the impact of the epidemic, the import of copper concentrate at Erlian Port was still suspended, and the Yangtze River Basin continued to be congested. In terms of imports, the LME0-3Back structure continued during the week, and the import window continued to close. In terms of scrap copper, as copper prices rose within the week, the price difference between refined copper and scrap copper continued to stand above a reasonable range, and the advantage of scrap copper substitution appeared. In terms of consumption, the weekly operating rate of copper rods was 62.79%, up 0.59% from the previous month, which was lower than expected, mainly because the sharp rise in copper prices in the middle of the week disrupted the rhythm of downstream procurement. In the off-season of seasonal consumption, demand continued to weaken. Since this week, companies have entered the holiday phase one after another, and demand may further cool down. In terms of inventories, global inventories continued to remain low. Among them, the LME was affected by the delivery on Friday, and accumulated inventory weekly. SHFE inventory warehouse receipts continue to go to the warehouse, and the social warehouse and the bonded area accumulate a small amount of inventory. Overall, demand will weaken further towards the end of the year. At present, the inflection point of inventory has not yet appeared. Under the fluctuation of macro factors, copper prices may continue to fluctuate and become slightly stronger.
1. Unilateral: Cautiously bullish
2. Inter-market: postpone
3. Inter-period: postpone
4. Options: postpone
1. Inflection point of inventory
2. U.S. Treasury yields continued to rise
3. The risk of the epidemic may increase.
1. The PX processing fee pulled back slightly from a high level.
(1) Most of the Korean installations have reduced the production load to around 70% - 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. In the early stage, the PX processing fee was too low, South Korean suppliers were not active in signing long-term contracts for the PTA factory, and the market was worried about more loss-making production cuts, resulting in a strong rebound in the PX processing fee. 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, and PX processing fees rebounded strongly. Zhongjin Petrochemical's original maintenance plan for 1.6 million tons of production capacity in early and mid-January was postponed again. Zhejiang Petrochemical's 2 million-ton restart plan was postponed to mid-January. Fujia Dahua and Fulian postponed their restart until mid-to-late January.
2. The processing fee of PTA is still high..
(1) Since the end of December, the long-term contract signing process of Hengli in 2022 is still slow. If it is still not signed successfully in January, the circulation of the follow-up traders may be tightened, causing the circulation inventory to be transferred from the middle and lower reaches to the upper reaches.
(2) The operating rate of downstream polyester is still high, and the processing fee of PTA continues to be high.
3. The operating rate of polyester is still higher than expected.
(1) Although production and sales were general this week, the operating rate of polyester surged to 87.5% (+2%). The production reduction units in the early stage have recovered, and the load reduction rate during the Spring Festival is slower than the previous seasonality.
(1) Unilateral: Cautiously bullish. PTA processing fees are still strong in the short term, and PX processing fees continue to rebound.
(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.
而从利多因素来看，上周北海、西非等地的轻质原油的实货贴水的确出现飙升，显示当前轻质原油偏紧，但就从ESPO贴水以及Brent Dubai EFS结构来看，近期亚太买兴并未显著增加，买兴增加的力量主要来自欧洲本地炼厂，一方面是法国Donges炼厂（产能21.5万桶/日）计划在3月份复产，因此近期在补充原料船货；另一方面，天然气价格的大幅下跌提振了欧洲简单以及轻度加氢型炼厂的生产利润，当前大西洋盆地的轻质原油紧缺是结构性以及短期性的，通过套利机制，欧洲将会很容易吸引美国出口的轻质原油船货，而亚洲也会减少北海、西非的套利船货转而采购ESPO以及东南亚等地的轻质原油，全球市场来看，目前原油现货并不紧俏，紧缺仅仅体现在北海轻质油，虽然这属于布伦特的定价盘，但我们认为这是短期的基本面因素。
1. 单边：谨慎偏多 2. 跨市：内外反套 3. 跨期：暂缓；4. 期权：暂缓
1. 累库拐点 货币政策导向 能源危机风险