Crude oil

International crude oil continued an upward trend overnight, with a daily increase of more than 2%. The Brent contract in April was approaching $60 per barrel. The relief of market anxiety has largely promoted the rebound in oil prices. Because of the signs of improvement in China's epidemic and the government's introduction of various policies to stimulate the economy, investors believe that the Chinese economy will soon rebound again, thereby driving demand for crude oil. In addition, the OPEC+ meeting in early March is expected to adjust the previous production reduction measures in response to the decline in demand. In general, we believe that the current crude oil is still in a rebound trend, and it is more advised to maintain the previous long strategies.

Raw materials of Polyester

Yesterday, the domestic main PTA2005 and MEG2005 contracts continued a narrow range of fluctuations. In the absence of spot price guidance, futures prices are difficult to operate independently of the spot. From the demand side, the terminal market is gradually recovering. As the impact of the epidemic weakens, market transactions will tend to normalize, and the probability of continued rise in demand is greater. 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 excess supply. The short-term focus will be on the operation of the equipment. Therefore, in terms of operation, it is still advised to hold the long position bought at the bottom previously.

Iron ore

Iron ore has rebounded recently, and according to the evaluation of supply and demand pattern in spring, the current price has reached a relatively high level of valuation. In terms or the 2005 contract, the current marginal supply of steel mills has no profit at 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 under the pressure of steel inventories, there is a tendency to deteriorate in March. Therefore, the market is no longer bullish, and it is advised to focus on the short opportunity when futures funds turned weaker.

Natural Rubber

Overseas rubber went down. The main force contract of TF05 fell by 0.5 or 0.36% to 137.4. The main force contract of JUR07 fell by 0.4 or 0.21% to 186.0. The SHFE rubber was weak relatively and fluctuated. The main force contract of RU05 fell by 45 or 0.34% and closed at 11,600, and the main force contract of NR04 fell by 40 or 0.41% and closed at 9,740. The quoted price for Qingdao rubber in USD fell by $5 per ton slightly with normal inquiries. The quoted price of RSS3 was $1,630 to $1,640 per ton. The spot price or CIF of STR20 was $1,385 to $1,390 per ton. The CIF of SMR20 in August was $1,435 per ton. The CIF of mixed rubber from Thailand in May was $1,420 per ton.

Lanjing News: General Motors said it would reduce sales, design and engineering business in Australia and New Zealand, and plans to phase out the local Holden brand by the end of 2021. GM also said that the company plans to withdraw the Chevrolet brand from the Thai market and will sell the local Rayong manufacturing plant to China's Great Wall Motors. These business restructurings will result in $1.1 billion in cash and non-cash expenses and will cause 1,500 people in Thailand, 828 in Australia and New Zealand to lose their jobs.

Due to the lack of demand and logistics capacity in the latex market, midstream trading is still weak, Latex price in Thailand has risen, while domestic price dropped slightly. According to third-party statistics, inventories in the Qingdao Free Trade Zone continues to accumulate, and inventories outside the zone have exceeded the level of the same period last year and are currently around 480,000 tons. It was heard that there was a small number of transactions in the downstream all-steel tire replacement market, and the market was gradually recovering.

Futures Operation Advice: The SHFE rubber running weakly. 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 11,570 below.

(For reference only)