Crude oil

International crude oil continued its upward trend overnight, and the relief of concerns over China's epidemic prompted a rebound in oil prices. In addition, investors believe that with the decline in Chinese demand, it is more likely that OPEC+ will deepen its production reduction agreement, thereby forming a new balance in the global crude oil supply and demand structure. In general, we believe that with the repair of the previous pessimism, the probability of oil prices continuing to rebound is relatively large. Overall, the current oil price is still relatively low, and long strategies is more recommended.

Raw materials of Polyester

Yesterday, the main domestic PTA2005 and MEG2005 contracts continued to rebound. The former stood firm at 4,500 yuan per ton, and the latter rose by more than 1% within the day. From the demand side, the terminal market has recovered yesterday, and the volume of polyester began to show up. Although the terminal recovery process is currently slow, the demand side will gradually return to normal with the unblocking of logistics and the resumption of work. In addition, as far as PTA and MEG are concerned, considering the decline in profits and weak demand, the operating rate of enterprises will gradually decline to hedge against the pressure of relatively excess supply, and the short-term focus will remain on the operation of devices. Therefore, in terms of operation, it is still advised to hold the long position bought at the bottom previously.

Iron ore

Iron ore has recently rebounded due to expected repairs, and arbitrage funds have further promoted the rhythm of the rebound. As for the current price, if the deliver superiority of the golden bubba powder was considered, the main contract has reached above $80 per ton (equivalent to 660 yuan per ton if deliver superiority was not considered). According to the evaluation of supply and demand pattern in spring, the current price has reached a relatively high level of valuation. At present, the marginal supply of steel mills has no profit at current futures prices. Fundamentally, due to the inventory backlog of steel plants plus the impact of the epidemic, the production reduction area of steel mills is expanding. The short-term negative environment has not improved, and there is a tendency to deteriorate in March. Therefore, the market is no longer bullish, and it is advised for the long position to stop profit at the current price and focus on the short opportunity when futures funds turned weaker.

Natural Rubber

The quoted price for Qingdao rubber in USD rose by $15 to $30 per ton with normal inquiries. There was scarce quoted price of RSS3. The spot price and CIF of STR20 in April was $1,385 to $1,400 per ton. The CIF of SMR20 in April was $1,405 per ton. The CIF of mixed rubber from Thailand in May was $1,425 to $1,430 per ton. Overseas rubber went higher. The main force contract of TF05 rose by 1.5 or 1.10% and closed at 137.8. The main force contract of JUR07 rose by 2.0 or 1.08% to 186.5. The SHFE rubber was relatively strong. The main force contract of RU05 rose by 200 or 1.74% and closed at 11,685, and the main force contract of NR04 rose by 210 or 2.18% and closed at 9,855.

Gasgoo News: On February 10, the Michelin Group officially released its 2019 financial report. The Michelin Group's annual sales were 24.135 billion euros, a year-on-year increase of 9.6%. The operating profit of business lines reached 3.009 billion euros, a constant exchange rate increase of 6.5% year-on-year. The net profit reached 1.73 billion euros, a year-on-year increase of 70 million euros . The market environment was still severe last year. The Michelin Group's tire sales decreased by 1.2% year-on-year, but due to the outstanding performance of the newly acquired business and strict operation management, the Group's performance has achieved a steady improvement.

As of February 17, the improving trend of prevention and control of the domestic epidemic was obvious. However, Japan and Singapore have become the two countries with the highest number of COVID-19 diagnoses besides China, and they are in the early stages of epidemic spread. These two countries are also important rubber pricing centers. It is advised to pay attention to strategies on increasing import profit. Of course, aside from the strategy, we hope that the epidemic will end soon.

Futures Operation Advice: The SHFE rubber went strong with agricultural commodities. As for the main contract of RU05, it is advised to hold the long position and pay attention to the support at the recent high level at 11,570.

(For reference only)