Crude oil

International crude oil continued its upward trend overnight, with Brent oil prices approaching the integer mark at $70 per barrel. China and the US are about to sign the first phase of the trading agreement, which has boosted risk appetite, and tensions in the Middle East have also added momentum to rising oil prices. However, impact of the Sino-US trade agreement and OPEC+ decisions to reduce production have been reflected in oil prices. Overall, we believe that there is limited space for oil prices to continue to rise in the short term and there is a risk of a retreat from the high level.

Raw materials of Polyester

Yesterday, the main 2005 contract of PTA dropped sharply at the close over evening session, and it immediately approached the drop limit position. In the short term, positions were reduced by more than 100,000 lots, and exit signs of long bullish positions were obvious. The main 2005 contract of MEG also appeared to fall. From a fundamental point of view, the current seasonal downward trend on the demand side is irreversible, and the supply side is under the pressure brought about by the centralized commissioning of new devices. It is difficult to change the expectation that the fundamentals will be bearish before the Spring Festival.

Iron ore

According to data released by Mysteel last week, the total inventory of imported sintered powder from 64 steel mills was 18.43 million tons, an increase of about 3 million tons from the previous bottom. The replenishment progress is about 60%, and there is a large volume of arrivals in ports, which boosted the replenishment process. It is estimated from the sail schedule that volume of arrivals is still high after New Year's Day, which will further speed up the replenishment of steel mills. The current price of the 2005 contract is overvalued relatively, but due to the optimistic emotion of steel mills this year, it is expected that the daily consumption during the Spring Festival will remain at high level, and the discount of futures is difficult to expand substantially.

Natural Rubber

The quoted price of Qingdao rubber in USD rose by $5 to $10 per ton with few inquiries. The quoted spot price of RSS3 was $1,610 to $1,620 per ton. The CIF of STR20 in March was $1,505 per ton. The spot price and CIF of SMR20 was $1,470 per ton. The CIF of mixed rubber from Thailand in March was $1,510 per ton. The quoted spot price of mixed rubber from Thailand in RMB was ¥11,750 per ton. Overseas rubber was strong relatively. The main force contract of TF03 rose by 1.8 or 1.24% and closed at 146.7. The main force contract of JRU05 fell by 0.4 or 0.20% and closed at 197.2. The SHFE rubber slumped at the close. The main force contract of RU05 fell by 25 or 0.19% and closed at 12,960, and the main force contract of NR03 fell by 25 or 0.23% and closed at 10,785.

QinRex: Accelerating the progress of the country's rural road construction projects by the Thai Rural Roads Administration is expected to drive domestic rubber consumption, and the consumption scale is currently estimated at 25,804 tons. The Office is preparing to accelerate the overall investment in the 2020 project budget. It is reported that there are more than 3,000 highway investment projects waiting for bidding in the Department. According to the agreement reached between the Department and the Rubber Administration, the purchase volume of rubber as a filler will be increased. According to the 2020 budget of the Ministry of Transport, the department will receive a total budget of 48.05 billion baht, of which 3% was the daily operating budget, and the other 97% is the investment budget. And the budget attributable to the maintenance of rural roads accounts for 50%.

It was the New Year holiday in Thailand and the local market is closed. As of mid-December, the delivery inventories of TOCOM RSS3 in Japan was reduced by 418 tons to 11019 tons, of which 99 tons were into the warehouse and 517 tons were out of the warehouse. Due to various reasons, the listing of T20 contracts in Japan has been extremely inactive so far, and the latest position of all contracts is only 125 lots.

Futures Operation Advice: The SHFE rubber slumped at the close with other commodities. As for the main force contract of RU05, it is advised to hold a long position and set a stop at the recent high level at 12,850 below. There is no evening session in recent days, and it is advised to pay attention to the risk of holding positions.

(For reference only)