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Daily Market Review on Specified Futures Products 2020.03.24

Fang submitted 2020-03-24 09:55:29

Crude oil

The US gasoline prices plummeted, and cracking spreads went negative. Crude oil prices rebounded yesterday, but the price of RBOB gasoline in the United States plummeted, causing the Brent-RBOB gasoline cracking spread to enter a negative range. The continued deterioration of overseas epidemics and the traffic control and home isolation policies implemented by the US and European governments will have a severe suppress on refined oil consumption in the coming months. In addition to the relatively strong performance of diesel oil worldwide, the spread of gasoline, jet fuel, and fuel oil cracking spread will continue to decline in the future. With reference to the situation in China, the impact of shrinking consumption on refined oil products has just begun. In the future, we will see a decline in the cumulative inventory of refined oil products and the reduction of crude oil processing capacity. For crude oil, if the refinery load continues to fall, it will severely reduce the demand for replenishment of the refinery. It does not rule out that there will be a new round of negative impact on oil prices in the future. In terms of futures operation, it is advised to maintain the short strategy; reverse cash and carry arbitrage strategy to long the back month contract and short the nearby contract is recommended for Brent oil. Guard against risks that epidemic was under control and OPEC reopens agreement to cut output.

Raw materials of Polyester

Affected by the sharp drop in oil prices last Friday, the main domestic PTA and MEG 2005 contract hit a daily low limit yesterday. The overall downward trend continued, but in the short term there were signs of oversold. Yesterday, naphtha and PX both fell sharply, but the price difference between PX and naphtha remained at $300 per ton. The processing fee of main PTA2005 contract rose sharply to around ¥720 per ton, and the production profit of naphtha-based MEG is close to $100 per ton. Therefore, the absolute prices of polyester raw materials are at historically low levels, and oversupply pressure caused by the expansion of production profits will still suppress prices. Overall, PTA and MEG may continue to bottom out.

Iron ore

With the spread of the epidemic, the global demand for terminal industrial materials has been reduced, and under the relatively rigid supply pattern, the iron element will be transformed into a surplus situation, and it is bearish on iron ore in the medium and long term. In the short term, we still need to pay attention to the impact of the Brazilian epidemic on the supply side. At present, two employees in Vale are infected. Although it has not affected production for the time being and it is also unlikely to affect supply in the later period, the market still has concerns about supply uncertainty. Position management and operation on back month contracts are recommended. Yesterday Platts plunged by $6.50, and the spot price at port also fell sharply. The current port price of golden bubba powder is equivalent to about ¥660 per ton.

Natural Rubber

Overseas rubber went down. The main force contract of TF06 fell by 8.2 or 6.96% to 109.6. The main force contract of JRU08 fell by 5.1 or 3.31% to 148.9. The SHFE rubber went down. The main force contract of RU09 fell by 425 or 4.23% and closed at 9,630, and the main force contract of NR05 fell by 430 or 5.22% and closed at 7,800. The quoted price for Qingdao rubber in USD fell by $20 to $40 per ton with general inquiries. The quoted price of RSS3 was $1,520 per ton. The spot price or CIF of STR20 was $1,160 per ton. The CIF of SMR20 in June was $1,180 per ton. The CIF of mixed rubber from Thailand in July was $1,200 per ton.

Tire China Network: Affected by various factors in the international environment, the global natural rubber production and price situation are volatile. In order to ensure that the supply of natural rubber meets the needs of the group, recently, Sumitomo Rubber Industry, the parent company of industry leader brand Dunlop Tire, established a natural rubber procurement subsidiary, Sumitomo Rubber (Singapore) in Singapore, the world's largest natural rubber trading center, to ensure a more stable supply of high-quality natural rubber to meet the needs of the Sumitomo Rubber Group. At present, the natural rubber procurement of Sumitomo Rubber Group is still mainly responsible for the natural rubber division of Sumitomo Rubber Asia (Tire) Co., Ltd., a tire sales subsidiary established in Singapore.

The drought in Thailand has continued. Only a small amount of rainfall was recently observed in Rayong Province. The average rainfall in March was only 0.32mm, and the historical average was 2.82mm. The climate in Yunnan is similar. The local government has invested 50 million yuan to guarantee the irrigation of farmland in 12 drought-affected cities.

Futures Operation Advice: In terms of the main RU09 contract, it is advised to long a slight position in the short term and set a stop at 9,300 below.

(For reference only)

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