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Daily Market Review on Specified Futures Products 2020.05.07

Fang submitted 2020-05-07 10:08:29

Crude oil

We believe that the market's focus in May will be on the implementation of OPEC+ production cuts and the progress of unblocking in Europe and America in addition to the previous storage capacity limit. From the perspective of inventory, India's land storage capacity is currently used up, and the number of its offshore floating warehouses has increased to 50 million barrels, and the number of global floating warehouses and cargoes in transit has continued to increase. From the perspective of the implementation of OPEC+ production cuts, the market is concerned about the distribution of bills of lading and exports of oil-producing countries in the Middle East (OSP in Saudi Arabia is also the focus of market attention), and finally the progress of unsealing in Europe and the United States. The number of travelers has begun to increase, and the recent decline in EIA gasoline inventory and signs of recovery in apparent consumption. Although demand has begun to recover, we expect that the pace of recovery will be slower because the overseas epidemic has not been completely controlled. The situation of a second outbreak cannot be ruled out. In terms of futures operation, it is advised to maintain the neutral strategy.

Raw materials of Polyester

Driven by the sharp rise in crude oil overseas during the May Day holiday, the main domestic polyester raw material contract in September opened sharply higher and then retreated yesterday. As far as demand is concerned, the domestic terminal production-to-sales rate before and after the May Day holiday is well, the prices of polyester finished products have increased to varying degrees, and there are obvious signs of periodic replenishment. From the supply side, the price difference between PX and naphtha was less than $240 per ton yesterday. The spot processing fee of PTA is still at a relatively high level of about ¥690 per ton. The loss of coal-based MEG is still serious, and the profit of naphtha-based MEG is acceptable. The pressure on the supply side has not been significantly alleviated. However, the bottom of crude oil has obvious signs of recovery, and the cost side has a stronger supporting effect. Therefore, in terms of operation, it is advised to maintain more bullish strategy.

Iron ore

The iron ore fluctuated yesterday, and the rebound of steel has a certain effect on the iron ore futures price. The current spot price of golden bubba powder in the port and Platt’s price is equivalent to futures price at ¥685 per ton, and PB powder in the port is equivalent to futures price at ¥710 to ¥715 per ton. After the holiday, it is expected that the steel mill will have short-term replenishment. According to shipping schedule, the arrival volume will increase significantly after May. In addition, the pressure on the demand-side steel will increase, and the iron ore will be under pressure in May. Recently, there are rumors that banks are demanding to increase the margin ratio of letters of credit for ore importing traders, which will lead to tighter funds for traders.

Natural Rubber

Overseas rubber rebounded. The main force contract of TF07 rose by 3.2 or 2.93% to 112.5. The main force contract of JRU09 was flat with the previous trading day and closed at 146.7. The SHFE rubber rose strongly. The main force contract of RU09 rose by 130 or 1.26% and closed at 10,435, and the main force contract of NR06 rose by 90 or 1.08% and closed at 8,410. The quoted price for Qingdao rubber rose by $20 to $30 per ton. The quoted price of RSS3 was $1,400 per ton. The spot price or CIF of STR20 was $1,170 to $1,185 per ton. The CIF of SMR20 in August was $1,210 per ton. The CIF of mixed rubber from Thailand in August was $1,215 per ton. The natural rubber cultivation area in Tripura, India, exceeds 85,000 hectares, producing 74,000 tons of rubber annually, and more than 1.5 million households are directly or indirectly related to natural rubber cultivation. Tripura receives an annual income of approximately 15 billion rupees (approximately RMB 1.4 billion) from the natural rubber sector. Due to the pandemic of the new coronavirus and the subsequent nationwide blockade, Tripura has suffered a loss of 25 billion rupees (approximately 230 million yuan) in its natural rubber sector in the past two and a half months.

Today is the Vesak Day in Indonesia, Singapore, India and Malaysia, and local markets are closed. In the recent month, Southeast Asian countries have frequent holidays, after which the production areas will enter a seasonal production increase period. The recent climate in Thailand is acceptable. The average daily rainfall in early May was 3.98mm, reaching 63% of the historical average.

Futures Operation Advice: The SHFE rubber went strong with chemical futures. As for the long position of the main RU09 contract, it is advised to set a stop at the previous high level at 10,260 below and pay attention to the pressure at the previous low level at 10,540.

(For reference only)

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