Crude oil

Due to the Thanksgiving Day, the overnight US market was closed, while Brent oil prices continued to fluctuate at a high level, and there was scarce news in the short term. From the perspective of the supply side, the resolution of the OPEC meeting next week will affect at least the global crude oil supply in the first half of next year, and due to the continuous decline in the number of active rigs in the United States, the growth rate of crude oil production in US will significantly decline in the future. From the demand side, the current market focus is still on the trade process between China and the United States, which will determine investors' expectations for the growth of global crude oil demand next year. Overall, we believe that oil prices may maintain a strong operating trend in the short term.

Raw materials of Polyester

Yesterday, the domestic main force contract of PTA and MEG deviated again. The main force 2001 contract of PTA continued to decline, and once fell below ¥4700 per ton, while the main force 2001 contract of MEG rose strongly to ¥4600 per ton above. From the demand side, with the approaching of December, the off-season will cause the decline in PTA and MEG demand to a certain extent, which has a particularly significant impact on the January contract. As far as PTA is concerned, yesterday, the price difference between PX and naphtha fell to $223 per ton, and the spot processing fee of PTA dropped to around ¥510 per ton, and the loss of the mainstream industry chain has increased. As far as MEG is concerned, yesterday, the port inventories in East China dropped to a lowest level for ten years of 437 thousand tons, and the current loss of MED made by naphtha has reached about $60 per ton, while the higher operating rate at this stage has put greater pressure on prices. In summary, we suggest that the long position of PTA stops profits gradually when it rebounds; as for MEG, it is advised to wait and see.

Iron ore

The volume of arrivals to the port this week was at a high level relatively. According to data by Mysteel, the total inventories of imported sintered powder in 64 steel mills were 1576.11 tons. The total daily consumption of sintered powder increased to 590,000 tons. It is estimated that the volume of arrivals to the port the next two weeks will still be at a high level according to the sail schedule. With the promotion of consumption and replenishment of steel mills, the port inventory is hard to increase, and may slow down from next week, which will help support spot prices of iron ore in the port. Yesterday, the iron ore fell with the steels. At present, the spot price of iron ore in ports is equivalent to about ¥675 per ton, and the upward space has been narrowed after the rebound, but there is expected to be no big risk in the fundamentals and iron ore still has the potential to go strong before the Spring Festival.

Natural Rubber

The quoted price of Qingdao rubber in USD fell by $5 to $10 per ton with general inquiries. The quoted spot price of RSS3 was $1,600 per ton. The CIF of STR20 in February was $1,470 to $1,480 per ton. The spot price and CIF of SMR20 was $1,425 per ton. The CIF of mixed rubber from Thailand in February was $1,460 to $1,465 per ton. The quoted spot price of mixed rubber from Thailand in RMB was ¥11,500 to $11.550 per ton. Overseas rubber went weak. The main force contract of JRU04 fell by 1.7 or 0.92% and closed at 183.0. The main force contract of TF01 fell by 2.2 or 1.54% and closed at 140.5. The SHFE Rubber slumped. The main force contract of RU05 fell by 135 or 1.07% and closed at 12,530, and the main force contract of NR03 fell by 120 or 1.11% and closed at 10,665.

China News Net: Recently, JD.com disclosed that the platform's tire sales in the past three years have exceeded 10 million units. At the same time, from January 1st to November 25th this year, JD has sold 110,000 motorcycles. In November 2017, JD.com announced the auto unbounded service strategy and officially launched the aftermarket auto B2B business, thoroughly created the entire industrial chain among brands, dealers, repairers, and consumers in the auto aftermarket, forming a B2B2C closed loop. In addition, JD.com also reached strategic cooperation with Double Star Tire, Cooper Tire, Michelin Tire, etc., to develop the automotive aftermarket.

The domestic price of basic raw materials in Hainan remains stable. The price of latex for SCRWF closed at ¥10,900 per ton, at a slight discount of ¥100 per ton in terms of the price of latex for concentrated latex, and it was also at a premium of ¥200 per ton in terms of latex price in Yunnan, which was same as the premium level of delivery price. According to statistics by Zhuo Chuang, the latest domestic all-steel operating rate is 68.1%, a year-on-year reduction of 6.4%. Unscheduled environmental inspections made fluctuations in operating rates. Shipments of production lines were weak, and inventories of finished tires increased.

Futures Operation Advice: The SHFE rubber slumped like the agricultural commodities over evening session. The main force RU05 contract was relatively weak, and it is advised to wait and see and pay attention to the support at the previous high level at 12,450 below.

(For reference only)