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Daily Market Review on Specified Futures Products 2020.03.13

Fang submitted 2020-03-13 10:31:49

Crude oil

The discount of contract of the recent month has continued to expand, and the arbitrage window for floating warehouses to hoard oils has opened. Yesterday, U.S. stocks broke the circuit again. As the overseas epidemic worsened (Trump announced the European and American travel ban) and the U.S. high-yield debt credit spread caused by the plummeting oil prices soared, the market is increasingly worried about the financial crisis at present, and market panic has once again suppressed the price of oil. From the perspective of crude oil itself, taking into account the suppression of demand by COVID-19 (the European and American travel ban is expected to affect nearly 200,000 barrels per day of jet fuel consumption) combined with OPEC+ production increase, it is expected that a huge supply-demand scissors gap will occur in the second quarter. At present, the discount of crude oil of the recent month has rapidly increased, indicating that the inventory will continue to increase in the future. The arbitrage window for oil storage in offshore floating warehouses continues to expand. This week, the global tanker freight rate has soared again, which also reflects the stimulus of traders in oil storage arbitrage in floating warehouses. Considering the increased export charter demand brought by Saudi Arabia ’s increased production, from the current supply and demand situation, the situation in the crude oil market may be more worrying than in 2014 and 2015. After all, there was no shock of epidemic in the last round of plunge. The current plunge in the monthly difference reflects that the magnitude and speed of the accumulation in the future may be far greater than the last time the oil price plummeted, and investors need to be cautious to pick the bottom. In terms of futures operation, it is advised to maintain the short strategy; reverse cash and carry arbitrage is recommended for Brent oil; strategy to long Brent2005 and short SC2005 is also recommended. Guard against risks that epidemic was under control and OPEC reopens agreement to cut output.

Raw materials of Polyester

With the drop in oil prices again, the main domestic PTA and MEG contracts showed signs of double dip yesterday. The collapse of the cost side in the short term dominates the futures price. From the demand side, the downstream and terminal operating rates and factory load have been steadily recovering recently. As far as PTA is concerned, the spot processing fee was still around ¥530 per ton yesterday, and the operating rate remained high. Yesterday the plant of Fuhaichuang with annual output of 4.5 million tons and plant of Hengli Petrochemical with annual output of 2.2 million tons were shut down for maintenance. Several sets of previously out-of-work plants have been restarted, and some maintenance of plants have also been postponed. The processing fee of the 2005 contract was around ¥630 per ton, and hedging pressure is still large. From the perspective of MEG, profits of naphtha-based system have rebounded significantly, but losses of coal-based system are more serious. In general, as the absolute prices of PTA and MEG were at historically low levels, it is still advised to buy a dip.

Iron ore

There is too much information and rumors in the iron ore market today, and the current supply and production of Vale have not been affected yet. On the demand side, under the influence of the decline in the external market, concerns about the decline in global demand have increased. Sentiment in the futures market has fluctuated sharply recently and drive the fluctuation in the spot price, and the speculation sentiment is still obvious. As the peak season of steel is approaching, the reality contradiction of steel and the industrial chain is close, and the current fundamentals are still bearish due to the short-term destocking pressure and decline in demand in the medium term. At present, the port price of golden bubba powder is equivalent to ¥688 per ton, and the futures price was at a discount of about 4%. In the short term, as the epidemic spreads around the world, all kinds of news are chaotic. Since iron ore mainly depends on imports, the uncertainty increases, and it is advised to operate cautiously.

Natural Rubber

Overseas rubber fluctuated at the bottom. The main force contract of TF06 fell by 2.1 or 1.64% to 126.0. The main force contract of JUR08 fell by 4.2 or 2.56% to 160.1. The SHFE rubber once rebounded at the bottom. The main force contract of RU05 fell by 65 or 0.62% and closed at 10,460, and the main force contract of NR05 fell by 55 or 4.05% and closed at 8,830. The quoted price for Qingdao rubber in USD fell by $5 per ton with general inquiries. The quoted price of RSS3 was $1,600 per ton. The spot price or CIF of STR20 was $1,280 to $ 1,300 per ton. The CIF of SMR20 in August was $1,330 to $1,340 per ton. The CIF of mixed rubber from Thailand in July was $1,330 to $1,340 per ton.

Yunken Website News: Affected by the spread of the COVID-19 epidemic and the severe cases in the United States, the United States has finally started the elimination of products under $300 billion tariffs imported from China. On March 6, local time, the Office of the United States Trade Representative released the list A of products under $300 billion tariff, exempting tariffs on medical protection products including masks, nitrile rubber gloves (medical grade), etc. There are a total of eight 10-digit tax code products, including two kinds of rubber gloves(4015.19.0510&4015.19.0550). During the validity period from September 1, 2019 to September 1, 2020, 7.5% of tariff will be exempted.

If priced in gold, the current value of natural rubber has fallen by about 30% (the extreme value is between -49% and +82%). On the one hand, the occurrence of systemic risks has been confirmed from the perspective of the rubber industry, and it also means that the current valuation is at the lowest level of about 10%. According to data released by Zhuochuang, the domestic all-steel operating rate is 54.8%, up 1.46% week-on-week and down 26.6% year-on-year.

Futures Operation Advice: The SHFE rubber went lower with other commodities. As for the main RU05 contract, it is advised to wait and see and pay attention to the support at the recent low level at 10,160 below.

(For reference only)

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