Crude oil

Yesterday, international crude oil surged first and then retreated. Brent's April contract once reached $60 per barrel, but then it fluctuated and went downward. Overnight, data released by the US Energy Agency showed that the increase in US crude oil inventories was less than market expectations last week. At the same time, gasoline and distillate inventories fell, and oil prices surged after the data was released. However, with the spread of the new coronavirus worldwide, investors are worried that its influence will not be eliminated soon, and this will push oil prices back down from their intraday highs. 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

Affected by the sharp rise in crude oil on Wednesday, the domestic main PTA2005 and MEG2005 contracts broke through the upper edge of the previous shock range and moved higher yesterday, but the intraday increase was less than 1%, and the futures price lacked a strong driving force. 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

Due to the excellent liquidity, the iron ore is easy to attract funds speculation. At present, the futures operation logic mainly lies in the valuation repair and stimulation expectation of demand in the future. From a fundamental point of view, it is still difficult for Vale to increase shipments significantly in the second quarter, and there is no major pressure on the supply side to provide conditions for speculation. However, with the rebound of the market, favorable conditions are gradually included in the price. At present, if the delivery superiority of golden bubba powder is considered, the price is equivalent to about $81 per ton. After March will be the main destocking stage of steel mills, we estimate that destocking may be less than expected. Due to the tight cash flow of the steel mill, the purchase of raw materials will still be suppressed, so we believe that current futures prices have entered the region of high valuations in terms of the spring supply and demand pattern. Based on the price of 2005 contract, the marginal supply of the virtual steel mill already has no profit, and the profit of the billet production under the current spot price of raw materials is also close to zero. 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 up slightly. The main force contract of TF05 rose by 0.8 or 0.58% to 138.2. The main force contract of JUR07 rose by 1.5 or 0.80% to 188.1. The SHFE rubber went down first and then rebounded. The main force contract of RU05 rose by 90 or 0.78% and closed at 11,690, and the main force contract of NR04 rose by 65 or 0.67% and closed at 9,805. The quoted price for Qingdao rubber in USD rose slightly by $5 per ton with limited inquiries. The quoted price of RSS3 was $1,640 per ton. The spot price or CIF of STR20 was $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 to $1,430 per ton.

Red Star News: On February 20th, the Ministry of Commerce held an online press conference. Wang Bin, deputy director of the Department of Market Operations, said that the Ministry of Commerce will work with relevant departments to introduce policies and measures to further stabilize automobile consumption and reduce the impact of the epidemic on automobile consumption. At the same time, all localities are encouraged to introduce measures to promote new energy vehicle consumption, increase traditional car purchase restrictions, and carry out old for new service to promote automobile consumption in accordance with changing circumstances.

Recently it was the Indian Shiva Festival, and local market was closed. As of February 10, the delivery inventories of RSS3 in Japan decreased by 264 tons to 10,662 tons, of which 209 tons were into the warehouse and 473 tons were out of the warehouse. According to the latest data released by Zhuochuang, the domestic all-steel operating rate was 51.0%, up 43.3% week-on-week and down 26.4% year-on-year. Production capacity was gradually recovering, and the small number of transportation vehicles still affected the resumption of production.

Futures Operation Advice: The SHFE rubber went down first and then rebounded, like the trend of black futures. As for the main contract of RU05, it is advised to hold the long position, set a stop at the recent low level at 11,540 below, and pay attention to the pressure at 11,740. And it is also advised to consider buying bull spreads strategy.

(For reference only)