Cushing may soon reach the capacity limit. Yesterday, the American pipeline company Enterprise product said that it will start the delivery of oil from Katy, Texas to Cushing on May 1. At present, the market is worried that some Seaway pipeline capacity has been reversed, which will accelerate Cushing to reach the tank capacity limit in early May. At present, the discount of the current month contract of WTI in terms of the next month contract has been about $8 per barrel, and the huge discount is close to 50% of the absolute price of crude oil. which is a very rare discount rate in history. The price difference between WTI and Brent has also been pulled for the same reason. At present, the local storage capacity of Cushing has become a haven for excess crude oil in Texas. the premium of oil price in Cushing in terms of that of oil in Midland and Houston will continue to drive crude oil to accelerate to deliver to Cushing. In the short term, although the US stockpile can relieve 30 million barrels of crude oil storage capacity, however, it cannot solve the fundamental contradiction. We believe that the global crude oil storage capacity is gradually being filled. Cushing may be the second after the Gulf of Saldanha in South Africa, but it is definitely not the last one. 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-month contract is recommended for WTI. Pay attention to the risk that epidemic is under control and supply disruptions are caused by geopolitical events.
Raw materials of Polyester
Domestic polyester raw material futures prices opened lower and then gradually rebounded. On the demand side, the terminal production and sales rate remained weak yesterday, and short-term demand was under pressure after the early speculative buying disappeared. From the perspective of the supply side, whether it is PTA or MEG, the negative processing profits remained high and has become the primary factor for suppressing prices. Overall, we believe that the future price of polyester raw materials is still facing downward risks.
Yesterday the open interest of iron ore increased and futures price rebounded, we still believe that the rebound was mainly due to large discounts and insufficient accumulation of spot pressure. The epidemic will lead to a decline in global demand for iron elements and lead to a long-term logic surplus of iron ore. From the time of increasing supply and decreasing demand of iron ore, it is expected that the contradiction will increase significantly from the end of April to May. In the short term, it is still necessary to control the position and wait for the contradiction to accumulate. At present, the current spot price of golden bubba powder in the port is equivalent to futures price at ¥703 per ton, and PB powder is equivalent to futures price at ¥715 per ton.
Overseas rubber went up slightly. The main force contract of TF07 rose by 2.0 or 1.77% to 115.1. The main force contract of JRU09 fell by 0.4 or 0.26% to 151.4. The SHFE rubber fluctuated. The main force contract of RU09 rose by 120 or 1.21% and closed at 10,060, and the main force contract of NR05 rose by 165 or 2.03% and closed at 8,285. The quoted price for Qingdao rubber in USD rose by $5 to $15 per ton with general inquiries. The quoted price of RSS3 was $1,430 per ton. The spot price or CIF of STR20 was $1,140 to $1,160 per ton. The CIF of SMR20 in August was $1,190 per ton. The CIF of mixed rubber from Thailand in August was $1,200 per ton.
21st Century Business Herald: On the evening of April 13, Linglong Tire disclosed its 2019 annual report. The annual report shows that for the whole year of 2019, the company achieved operating income of 17.164 billion yuan, an increase of 12.17% year-on-year; net profit attributable to shareholders of listed companies was 1.668 billion yuan, an increase of 41.20% year-on-year. Meanwhile, for the whole year of 2019, the company has produced 61.947 million tires and sold and 58.998 million tires, an increase of 12.17% and 10.37% year-on-year, respectively, which reaches a record high.
Recently, there are many festivals in the main producing areas. Today Laos and Cambodia continue the Buddhist New Year, and market of the two areas are closed. In terms of synthetic rubber, Sinopec's trading improved after butadiene price was cut to 3,500 yuan per ton last week. Quotation of HCBR bottomed out, some suppliers raised the ex-factory price by 200 yuan per ton, but the terminal demand was not significantly increased due to export obstruction.
Futures Operation Advice: As for the main RU09 contract, it is advised to hold the long position and set a stop at the recent low level at 9,930 below.
(For reference only)