Crude oil

Overnight international crude oil prices surged first and then fell, and worries about the China epidemic still dominated oil prices. Yesterday, the OPEC+ technical committee proposed to continue to reduce the average daily output of 600,000 barrels to cope with the decline in global crude oil demand. Meanwhile, the production reduction date was extended to June. However, Russia's attitude was uncertain, and it failed to agree to the decision immediately. Considering that this week is only a meeting of the OPEC+ technical committee, which has not decided on the right to reduce production, it will still have to wait until the OPEC+ meeting in March in the future. In general, we believe that after continuous declines in the previous period, there is limited room for oil prices to continue to fall, and long strategies are recommended.

Raw materials of Polyester

Yesterday, the main domestic PTA and MEG contracts fluctuated in a narrow range. After a rapid rebound at the bottom of the previous period, the future price began to fluctuate to digest the existing factors of supply and demand. From the downstream point of view, the delay in rework of workers and the blocked transportation, which will directly lead to the rapid accumulation of finished product inventories of polyester enterprises and the reduction of the operation load. As far as PTA is concerned, the current industry chain profits were at the bottom, and the PTA spot processing fees fell to ¥350 per ton again, and the late maintenance may be intensified. From the perspective of MEG, the cash flow of various processes suffered a loss, especially coal factory, which may drive the operating rate down significantly. Therefore, in operation, it is advised to hold the long position bought at the bottom previously.

Iron ore

As the downstream steel market has not yet recovered and the backlog of steel mills is relatively heavy and steel mills have replenished inventories sufficiently before the Spring Festival, there was no replenishment demand for iron ore in the short term. According to the latest data by Mysteel, the output of steel mills this week was 9.44 million tons, indicating that there has been maintenance in steel mills and the iron ore is under pressure. In terms of the absolute price, considering the delivery superiority of golden bubba powder, the futures price is reasonable currently in terms of the plats price, and it is advised to wait and see.

Natural Rubber

The quoted price for Qingdao rubber in USD rose by $10 to $15 per ton with scarce inquiries. The CIF of STR20 in April was $1,390 per ton. The CIF of SMR20 in August was $1,400 to $1,405 per ton. The CIF of mixed rubber from Thailand in June was $1,410 to $1,415 per ton. Overseas rubber retreated slightly. The main force contract of TF05 fell by 0.2 or 0.15% to 134.3. The main force contract of JUR07 fell by 1.9 or 1.18% to 176.5. The SHFE rubber opened lower and then rebounded. The main force contract of RU05 rose by 125 or 1.11% and closed at 11,340, and the main force contract of NR04 rose by 185 or 1.96% and closed at 9,630.

QinRex: Global passenger car sales in 2019 fell by 4.4% year-on-year to 90,265,508 units. Among the top five single auto markets, sales in China fell by 8.3%, and sales in the United States and Japan fell by 1.4%, India also had negative growth, only Germany Realize growth. It is also driven by Germany that passenger car sales in Western Europe increased by 0.8%, and despite the 2.7% decline in the Eastern European market, total European sales were still slightly higher than sales in 2018.

As of January, the latest NINO 3.4 index closed at +0.6 °C, and continued to develop in the direction of El Nino. According to the latest data released by Zhuochuang, the domestic all-steel operating rate is 9.4%, up 30.0% week-on-week and down 83.5% year-on-year. Under the impact of the epidemic, the operating base is low, and the fluctuation rate is increasing. Most production lines have replenished inventories for more than 30 days, which can meet the demand after resumption.

Futures Operation Advice: The SHFE rubber fluctuated and went up like the trend of chemical futures. As for the main contract of RU05, it is advised to hold the long position and set a stop at the recent low level at 11,190 below.

(For reference only)