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Daily Market Review on Specified Futures Products 2020.05.18

Fang submitted 2020-05-18 14:53:57

Crude oil

In the latest monthly reports released by the three major organizations, the supply of non-OPEC has been substantially revised down. However, for demand, EIA and OPEC continued to undergo substantial repairs, but IEA, which has been more pessimistic in the earlier period, has revised up its demand estimate this time. Judging from the balance sheets of the three major institutions, the common view in the market is that supply and demand will have an inflection point in the third quarter. Due to the realization of OPEC's production reduction and non-OPEC's production reduction, the oil market will change from oversupply to short supply in the third quarter, thereby achieving the shift from accumulation to the destocking. In terms of futures operation, it is advised to maintain the neutral strategy and wait and see temporarily.


The rebound of crude oil prices drives the cost up, and the purchase of mainstream factories drives the basis of PTA to go strong. The estimated balance sheet in May is still accumulating rapidly under the current high inventory background. Under the background of polyester export demand suppressed by the epidemic, it is necessary to lower the PTA processing fee to prompt PTA to reduce production to rebalance. In terms of operation, it is advised to wait and see for unilateral strategy; for the strategy across varieties, under the current maintenance plan, it is estimated that the accumulated inventory of PTA in May will be large, and its performance will be weak; for basis trading and strategy across period, the high inventory problem has not been resolved, and the 9-1 spread went down to the rolling window. It is advised to focus on the risks of unilateral volatility of recent crude oil prices, the turning point of the epidemic situation in the external market, the possibility of non-profit maintenance under the high production concentration of the PTA plant and the downstream restock space.

Natural Rubber

Overseas rubber fluctuated weakly. The main force contract of TF09 rose by 1.4 or 1.22% and closed at 116.6. The main force contract of JRU10 rose by 1.9 or 1.26% and closed at 153.0. The SHFE rubber retreated at close. The main force contract of RU09 fell by 65 or 0.63% and closed at 10,230, and the main force contract of NR07 fell by 45 or 0.54% and closed at 8,353. The quoted price for Qingdao rubber rose by $10 to $15 per ton with acceptable inquiries. 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 $1,200 per ton. The CIF of mixed rubber from Thailand in September was $1,220 per ton.

Citing the news of the US "Tire Dealer of Hyundai": Bridgestone Americas will resume all tire production operations in North America and South America by the end of May, including the passenger tire plant that has been closed since March. According to the company, all factories will resume operations in accordance with the latest safety agreement of the Center for Disease Control and Prevention as a guide to provide employees with a safe and healthy environment. In late March, Bridgestone Americas launched a phased restart plan, and the Bandag Refurbished Rubber Plant in North America resumed operations on March 29; on April 13, it restarted the North American Commercial Tire Plant and North American Fieldstone Industrial Products and Fieldstone Building Products Factory.

Rainfall is common in Thailand, and heavy rains have recently been observed in Surat Thani and Trang. The average daily rainfall all over the country is 3.60mm, down year-on-year and month-on-month. As of last week: Domestic RU contract inventory subtotal-futures was 5 thousand tons, down 10.8% week-on-week; the subtotal inventory of NR contract was 1 thousand tons, down 71.1% week-on-week. And there is no signal of accumulating inventory.

Futures Operation Advice: The SHFE rubber retreated at close like the trend of Ethylene Glycol. As for the long position of the main RU09 contract, it is advised to set a stop at the recent low level at 10,130.

(For reference only)

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