Crude oil

Crude oil inventories and exports of Saudi Arabia increase significantly. According to Kpler schedule data, OPEC crude oil exports remained stable in March, but Saudi Arabia increased its export volume to 9.64 million barrels per day in the last week of March, while the average export volume in the first three weeks was 7 million barrels per day. Saudi Arabia is realizing its decision to increase supply, and its exports to Egypt and Japan have increased significantly. In addition, its domestic inventory has also increased from 66 million barrels to 77.3 million barrels. In addition, Iraq and the UAE will also significantly increase exports in April. We believe that April will be the darkest moment of the crude oil market. It is expected that onshore and offshore inventories will continue to increase significantly. At present, the spot price of crude oil is extremely weak, and the actual price of some crude oil has fallen to single digits, but we believe that as more refineries reduce processing capacity and Saudi Arabia increases supply, some spot oil prices may fall to near zero, and once the global tank capacity is approaching the limit, crude oil futures prices will also be under pressure again. 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

The trends of domestic PTA and MEG showed a certain differentiation yesterday, the former fell under pressure and the latter fluctuated. From the demand side, the cancellation or extension of foreign trade orders caused by overseas epidemics has begun to increase. This week, polyester companies began to continuously reduce prices and stimulate terminal procurement. As far as PTA is concerned, due to the restart of the device shutdown early, under the condition that the existing processing fee remains at a high level, the operating load of the enterprise has increased significantly, and the pressure from the supply side has been significant. In contrast, although the profit of naphtha-based MEG is still acceptable, coal-based enterprises began large-scale shutdowns yesterday, and the starting load may be reduced to around 50%, which may ease some of the supply pressure. Overall, PTA and MEG will continue to oscillate, but MEG may be slightly stronger than PTA.

Iron ore

Yesterday, the iron ore finally broke down with the related futures varieties. The market sentiment on the iron ore became more objective and the spot transactions in the port also dropped significantly. The current spot price of golden bubba powder at the port is equivalent to ¥679 per ton. Fundamentally, the inventory at 7 foreign ports has rebounded. It is expected that domestic shipments will increase in the later stage. As the demand for terminal steel declines, the demand side will gradually fall, and the drag on iron elements will begin to show. The pressure on spot is expected to increase from the end of April to May, and the medium- and long-term trend continues to be bearish on iron ore. In the short term, we still need to pay attention to the uncertainty caused by the epidemic in Brazil and the excessive discount. It is recommended to control the position and focus on back month contracts.

Natural Rubber

Overseas rubber went down weakly. The main force contract of TF06 fell by 3.2 or 2.98% to 104.3. The main force contract of JRU08 fell by 2.1 or 1.50% to 138.0. The SHFE rubber went weak. The main force contract of RU09 fell by 200 or 2.07% and closed at 9,480, and the main force contract of NR05 fell by 145 or 1.87% and closed at 7,620. The quoted price for Qingdao rubber in USD fell by $20 to $30 per ton with general inquiries. The quoted price of RSS3 was $1,420 per ton. The spot price or CIF of STR20 was $1,060 to $1,080 per ton. The CIF of SMR20 in August was $1,110 per ton. The CIF of mixed rubber from Thailand in August was $1,130 per ton.

A brief analysis by the 315i Network: According to data released by the Thai Customs, Thailand’s natural rubber (including composite and mixed rubber) exports in February were about 452,100 tons, which increased by 3.55% month-on-month and 1.89% year-on-ear. Among them, the export volume of natural rubber (excluding composite rubber) was about 278,600 tons, down month-on-month and year-on-year; the composite rubber realized a both month-on-month and year-on-year increase. Due to the impact of the Spring Festival holiday in China, the replenishment sentiment in the market was high, and the cargo arrived at the port after the Spring Festival.

Today is the Vietnamese King's Day, and the local market is closed. As for latex, the main upstream producing countries are in the off-season, and the processing enthusiasm for plants is not active. The transaction prices of some brands fell below ¥1,000 per ton. Domestic demand is slowly recovering, and internal and external prices are still reverse. The downstream replacement tire market ushered in a small peak of resumption of work, and the delivery of goods was acceptable. Distributors' inventory of finished products declined, but their enthusiasm for replenishment was not high.

Futures Operation Advice: The main RU09 contract fluctuated weakly, and it is advised to pay attention to the suppress at the previous high level at 9,660 above.

(For reference only)