Crude oil

Oil prices continue to fall, and negative crude oil prices have now appeared in the United States. According to Bloomberg News, a crude oil called Wyoming Asphalt Sour was quoted at $-0.19 per barrel yesterday. Because the crude oil is inland, the pipeline capacity is limited, so after the local warehouse is full, producers will have to pay extra cash to buyers who can transport the oil. We think this rare situation arises because there is no demand, and the situation of negative prices has also appeared in the US natural gas and propane markets. If Brent and WTI prices continue to fall in the future, inland oil types such as Canada and Bakken will also face the possibility of similar negative prices, which will force local producers to increase Production reduction. We believe that it is necessary to consider when the global storage capacity is exhausted under the vacuum of demand. 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 near-month 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

With the second shock of demand and the decrease in costs, the price of domestic polyester raw materials continued to decline unilaterally yesterday. The main MEG2005 contract fell below the round mark of 3,000 per ton, and panic spread. Due to the continuous spread of overseas epidemics, the export of textiles and clothing has been greatly impacted, and the demand side is facing significant pressure. At the end of the month, several sets of PTA devices overhauled were restarted, and the supply pressure will appear once again. Moreover, the processing profit of PX, PTA and naphtha-made MEG chains is still high. Therefore, although the absolute prices of polyester raw materials are at historically low levels, oversupply pressure caused by the expansion of production profits will still suppress prices. Overall, the trend of PTA and MEG is still weak relatively.

Iron ore

With the decline in the demand for terminal steel products gradually falling, the drag on iron elements has also begun to appear, the cumulative decline in scrap steel in the past half month reached ¥100 per ton. On the supply side, the current impact of the epidemic is relatively limited, and the inventory at 7 ports abroad has rebounded. It is expected that the shipments will increase in the later stage, and the pressure of iron ore is increasing. With the spread of the epidemic, the sluggish sheet steel will force steel mills to cut production in the later period, 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. Affected by the uncertainty of supply side in the short term, there are still concerns in the market, so the market may continue the volatile situation. It is advised to control the position. The current spot price of golden bubba powder at the port is equivalent to ¥674 per ton.

Natural Rubber

Overseas rubber went down weakly. The main force contract of TF06 fell by 2.1 or 1.91% to 107.9. The main force contract of JRU08 fell by 6.7 or 4.51% to 141.7. The SHFE rubber opened lower and fluctuated. The main force contract of RU09 fell by 225 or 2.32% and closed at 9,475, and the main force contract of NR05 fell by 240 or 3.05% and closed at 7,630. The quoted price for Qingdao rubber in USD fell by $20 to $25 per ton with scarce inquiries. The quoted price of RSS3 was $1,450 per ton. The spot price or CIF of STR20 was $1,090 to $1,110 per ton. The CIF of SMR20 in June was $1,120 per ton. The CIF of mixed rubber from Thailand in August was $1,150 per ton.

Qianzhan Network News: affected by the epidemic, condom maker Malaysia Karex Co. was forced to suspend production for more than a week, and global condom supply will soon enter a state of emergency. One in every five condoms worldwide is produced exclusively by Recreation. Karex produced 4 billion condoms last year. Although Karex was licensed to resume production on Friday, only 50% of its employees are subject to special exemptions from key industries.

The drought climate in Thailand continues. Light to moderate rain was observed only in Krabi and Songkhla provinces recently. The average monthly rainfall is only 10% of normal years. As of mid-March, the TOCOM delivery inventory in Japan was reduced by 443 tons to 10,182 tons, of which 780 tons were into the warehouse and 1223 tons were out of the warehouse. The discharge volume from warehouse exceeded 1.000 tons again and was higher than the previous ten days.

Futures Operation Advice: In terms of the main RU09 contract, it is advised to long a slight position and set a stop at the recent low level at 9380 below.

(For reference only)