Crude oil

International crude oil went up sharply and then retreated overnight, and the intraday loss was more than 1%. The renewed uncertainty concerns of trade consultation uncertainty concerns led to oil prices reversing last Friday's gains. Currently, in the absence of significant changes in the supply side, the fluctuation of oil prices is more likely to follow the expected changes in the demand side, and the Sino-US trade relations becomes the primary factor affecting the change in oil demand, which will directly determine the growth in global demand next year. Overall, we believe that oil prices may maintain a strong volatility in the short term, and it is advised to wait for the clarity of Sino-US trade relations.

Raw materials of Polyester

Yesterday, the domestic main force 2001 contract of PTA fluctuated and went up, and futures closed near the highest intraday price, with a solid support at the previous bottom. The main force 2001 contract of MEG fluctuated at a wide range. As far as PTA is concerned, Yesterday PTA's spot processing fee has rebounded to above ¥550 per ton, and the price difference between PX and naphtha was still below $260 per ton, and downstream profits also remain low. The profits of the entire industry chain have seriously declined, and the space for further compression was limited. In terms of MEG, domestic imports became unturned, but the process of naphtha and ethylene is still at a loss. Overall, it is advised to continue to hold a slight long position of PTA and pay attention to the long opportunity on MEG.

Iron ore

Generally, steel mills usually started replenishment before December every year. The current inventories of sintered powder in 64 sample steel mills were 15.05 million tons, which were at a low level in the same period of history, and the replenishment may happen at any time. With the rapid decline in inventories of steel mills and weather turning cold in the north area, the replenishment might be promoted in advance, and the fundamentals are expected to get better and drive the spot and futures price rebound. However, due to expectation of adequate supply in the medium term, the rebound may be limited. The spot price at the port is currently equivalent to ¥660 to ¥665 per ton, at a premium of about 5% in terms of the futures price.

Natural Rubber

The quoted price of Qingdao rubber in USD rose by $10 to $20 per ton with normal inquiries. The quoted spot price of RSS3 was $1,600 per ton. The CIF of STR20 in February was $1,410 per ton. The spot price and CIF of SMR20 was $1,360 to $1,365 per ton. The CIF of mixed rubber from Thailand in February was $1,430 per ton. The quoted spot price of mixed rubber from Thailand in RMB was ¥11,000 to ¥11,200 per ton. Overseas rubber opened higher and then retreated. The main force contract of JRU04 rose by 0.3 or 0.16% and closed at 182.6. The main force contract of TF01 rose by 1.6 or 1.17% and closed at 138.1. The SHFE Rubber fluctuated slightly. The main force contract of RU01 fell by 45 or 0.37% and closed at 12.055, and the main force contract of NR03 was flat with the last trading day and closed at 10,385.

CNR News: The Global Rubber Conference, the most influential industry event in the international rubber industry, will be held in China for the first time in mid-December 2019. It is understood that the Global Rubber Conference is based on the "Natural Rubber Industry 2.0 – Game Rules of Major Innovation " as a comprehensive theme this year, covering the upstream, midstream and downstream industry chain of natural rubber, and is committed to providing a platform for high-quality discussions and exploring the key factors and development strategies at the international rubber and rubber products market level. Leaders from major international organizations such as the ANRPC, the IRSG, and the IRRDB have decided to join the 200 foreign participants from 25 countries.

The temperature dropped to around 10 °C in domestic Xishuangbanna area. Since it was near the traditional stop-cutting period, the latex supply was gradually reduced, and the latex price was reported to ¥9,600 to ¥10,100 per ton, at a premium of ¥400 to ¥500 per ton in terms of the cup lump price. According to third-party statistics, the inventories outside the bonded area has increased again since mid-October, with a cumulative range of about 12%.

Futures Operation Advice: The SHFE rubber fluctuated slightly. As for the main force contract of RU01, it is advised to short a slight position at 12,160 above and set a stop at the previous high level at 12,260 above.

(For reference only)