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Daily Market Review on Specified Futures Products 2020.02.12

Fang submitted 2020-02-12 11:47:17

Crude oil

After the previous second dip, the overnight international crude oil rebounded from the bottom. The optimistic expected turning point in the epidemic in China has prompted oil prices to stop falling and rise, and US crude oil is approaching $50 per barrel. The monthly report released by the US Energy Agency yesterday showed that due to the decline in Chinese demand, it has reduced the average daily oil consumption growth rate this year by 310,000 barrels to 1,030,000 barrels. At the same time, Rystad Energy, the world’s leading independent energy consulting agency, also reduced the increase in daily oil consumption from 1,100,000 barrels last month to 820,000 barrels. However, we believe that with the successful experience of reducing output and boosting oil prices, OPEC+ has a higher probability of reaching a compromise in the later stage. Overall, the current oil price is already relatively low, and long strategies is more recommended.

Raw materials of Polyester

Yesterday, the domestic main PTA2005 contract fluctuated and rebounded, while the main MEG2005 contract showed a certain trend of rising first and then falling. As far as the downstream market is concerned, the current overall start-up load is close to a low of 60% in recent years, and the space for further reduction in the later period is relatively limited. From the perspective of PTA, the spot processing fee yesterday was as low as 450 yuan per ton. Recently, the news of PTA plant shutdown and maintenance began to increase, and the PTA may face the possibility of supply compression. From the perspective of MEG, the cash flows of various processes are currently at a loss, especially for coal-based enterprises, which may lead to a significant decline in the operating rate of enterprises, but the successful commissioning of new plants of Hengli Petrochemical and Zhejiang Petrochemical will make up for the reduction in supply to a certain extent.. Therefore, in terms of operation, it is advised to hold the long position bought at the bottom previously.

Iron ore

Vale released its fourth quarter report. The output of iron ore fines in the fourth quarter of 2019 was 9.6% lower than the previous month, and pellet production fell by 15.4%, while the sales of fines and pellets were 8.89 million tons, an increase of 4.4% from the previous month, indicating that inventories of the mine keep shrinking. For the remaining 40 million tons of unrecovered production capacity, Vale plans to restore 15 million tons in 2020. In addition to the impact of Brazil's flood, comprehensive consideration of vale supply is still not optimistic. As the steel plant has fully replenished inventories before the Spring Festival, there was no replenishment demand in the short term. No matter whether the steel plant reduced its output due to backlog of formed products, it will create a negative environment for iron ore price. However, from the perspective of absolute prices, after the surge yesterday, if the delivery superior and price difference of golden bubba powder are taken into account, it is roughly equivalent to Platts price of $77 per ton. The valuation of the market price is reasonable, and it is advised to pay attention to the short opportunity at 630 yuan per ton.

Natural Rubber

The quoted price for Qingdao rubber in USD rose by $10 to $20 per ton with more inquiries. The CIF of STR20 in April was $1,410 per ton. The CIF of SMR20 in August was $1,410 to $1,415 per ton. The CIF of mixed rubber from Thailand in June was $1,420 per ton. Overseas rubber went up. The main force contract of TF05 rose by 2.4 or 1.78% to 136.9. The main force contract of JUR07 rose by 1.9 or 1.08% to 177.1. The SHFE rubber went up. The main force contract of RU05 rose by 155 or 1.37% and closed at 11,500, and the main force contract of NR04 was rose by 100 or 1.05% and closed at 9,640.

QinRex News: Vietnam’s Ministry of Agriculture and Rural Development recently said that Vietnam’s rubber exports resumed growth in 2019, with exports reaching $2.26 billion, a year-on-year increase of 8.3%. Vietnam continues to be the world’s third largest rubber producer with an international market share of 8.1%, second only to Thailand and Indonesia. Vietnam is also the world's third largest exporter of natural rubber, after Thailand and Indonesia. However, oversupply in the international rubber market will continue until 2025, and various departments, localities and industries should check and update the current status of rubber production, plan and strictly manage the rubber planting area and output to meet market and ecological conditions, maintain the balance between supply and demand, improve rubber prices and economic benefits, reduce risk of rubber growers and increase the role of rubber trees in afforestation and forest protection.

In terms of synthetic rubber, the production line was lowered due to inventory pressure, and downstream factories have not resumed work and lack of demand. Yesterday, the sales company lowered the prices of finished SBR and BR by 400 yuan per ton. As of late January, the delivery inventories of RSS3 in Japan increased by 461 tons to 10,926 tons, of which 676 tons were into the warehouse and 215 tons were out of the warehouse.

Futures Operation Advice: The SHFE rubber was relatively strong like the trend of building materials. 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 11,340 below.

(For reference only)

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