Crude oil

International crude oil continued to fluctuate at a high level overnight, and oil price volatility was relatively small. Data released by the US Energy Agency yesterday showed that domestic inventories of crude oil in US last week have risen for the third consecutive week, an increase of 2.2 million barrels, which were higher than the market expectation of 1.6 million barrels. Meanwhile, the average daily production increased by 200,000 barrels to a historical high level of 12.8 million barrels. However, due to the slowdown of investment in domestic crude oil exploration in US, the increase in crude oil production is expected to slow down next year. The current market focus is still on the trade process between China and the United States. The rise in oil prices in the past two weeks has also benefited from the easing of trade tensions between the two countries. Overall, we believe that oil prices will continue to fluctuate strongly in the short term.

Raw materials of Polyester

Yesterday, the domestic main force 2001 contract of PTA fluctuated and went up slightly, and the futures price was running around ¥4,700 per ton. The main force 2001 contract of MEG was relatively strong, and the price stood at ¥4,500 per ton and continued the rebounding trend. Yesterday PTA's spot processing fee has dropped to ¥500 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, the port inventories of the East China area announced yesterday fell by 50,000 tons again to 510,000 tons, which were below the normal level, and the continued loss of the naphtha system led to a decline in the volume of port arrivals. Overall, it is advised to hold a slight long position of PTA and pay attention to the long opportunity on MEG.

Iron ore

The total inventories at 45 ports this week reached 123.73 million tons, down 2.13 million tons week-on-week, and the evacuation volume of cargoes from port was 3.16 million tons, up 11 tons week-on-week. The increase in the evacuation volume from port indicated that some steel mills were carrying out winter storage activities. From the perspective of inventories of steel mills, the inventories of sintered powder in 64 sample steel mills were 15.5 million tons this week, which were still at a low level in the same period of history. Recently, with the rapid decline in inventories of steel mills, the replenishment might be promoted in advance, and the fundamentals are expected to get better and drive the spot price rebound. The spot price at the port is currently equivalent to ¥655 to ¥605 per ton, at a premium of 5% in terms of the futures price.

Natural Rubber

The quoted price of Qingdao rubber in USD fell by $10 to $20 per ton with normal inquiries. The quoted spot price of RSS3 was $1,580 per ton. The CIF of STR20 in February was $1,420 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 $1,425 per ton. The quoted spot price of mixed rubber from Thailand in RMB was ¥11,050 per ton. Overseas rubber slumped. The main force contract of JRU04 fell by 2.1 or 1.15% and closed at 179.9. The main force contract of TF01 fell by 2.1 or 1.52% and closed at 136.5. The SHFE Rubber fluctuated weakly. The main force contract of RU01 fell by 135 or 1.12% and closed at 11.920, and the main force contract of NR03 fell 80 or 0.77% and closed at 10,265.

QinRex News: The Thai Ministry of Agriculture is trying to limit the spread of fungal diseases that have damaged rubber trees in the four southern provinces. Since its discovery in September, the fungal disease (Pestalotiopsis) has affected more than 330,000 Lai plantations in the four provinces of Narathiwat, Yala, Pattani and Trang. The disease caused the leaves of the rubber tree to fall, and the yield has dropped by 50%, and rubber production has been reduced by 40,000 tons so far.

The recent rainfall in Thailand was generally moderate. As of mid-term, the weighted rainfall of the whole region was 7.61mm, which was equivalent to the historical average of 7.75mm. It was the first change of the month for the main force NR contract, moving from the 02 contract to the 03 contract (whether it was caused by trim of position of 02 contract still remains to be seen). The imported property of the NR contract may make the contract different from the RU contract and become a continuous main contract.

Futures Operation Advice: The SHFE rubber fluctuated at low level. As for the l the main force contract of RU01, it is advised to wait and see and pay attention to the suppress at the previous low level at 12,080 above.

(For reference only)