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### Daily Market Review on Specified Futures Products 2020.05.20

submitted 2020-05-20 11:01:34

Crude oil

API crude oil inventories fell. After the crude oil market is quickly rebalanced, the main contradictions in the current oil market are concentrated on the refinery and refined oil sides. The refinery is currently facing several major difficulties: 1. Refining profits are sluggish. Although the margin of gasoline profits has recently improved, the performance of other oil products has been weak. The recovery rate of the fundamentals of refined oil is significantly slower than that of crude oil. The recent rebound in absolute crude oil prices and spread structure has doubled the pressure on refineries; 2. The current recovery of refined oil demand is not synchronized, gasoline recovery is relatively fast, but jet fuel and diesel are still relatively surplus, in order to cope with the impact of demand caused by the epidemic, the refinery reduced the yield of gasoline and jet fuel by reducing the atmospheric and vacuum operating rate and changing the distillation temperature before unblocking, which resulted in the rising yield of diesel, and there has been a substantial increase in diesel inventories and floating positions in major regions of the world. Recently, the first demand recovery is gasoline, but the demand for jet fuel is still very weak. At present, refineries have to rearrange product yields in response to the market, but some operation problems still exist and is difficult to match the situation completely; 3. The drastic reduction of OPEC+ production makes medium and heavy crude oil scarce again, especially for Asian refinery, and may return to logic of materials filling the gap last year, passively increasing in imports of light crude oil from the West End, which will also have a large impact on the refinery's product structure. In terms of operation, it is advised to maintain the neutral strategy, and wait and see temporarily.

PTA

The rise in cost of crude oil drags down the processing profit of PTA, and Polyester rise to follow up. 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, it is estimated that the accumulated inventory of PTA will continue in May and June, and its performance will be weak; for basis trading and strategy across period, it is advised to focus on the basis adjustment ability of mainstream factories in the short term, which may provide good opportunity for reverse cash and carry arbitrage. 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 went up slightly. The main force contract of TF09 rose by 1.4 or 1.21% and closed at 117.2. The main force contract of JRU10 rose by 2.3 or 1.52% and closed at 153.7. The SHFE rubber was relatively strong and fluctuated. The main force contract of RU09 rose by 65 or 0.63% and closed at 10,395. and the main force contract of NR07 rose by 20 or 0.24% and closed at 8,460. The quoted price for Qingdao rubber rose by $5 to$10 per ton with general inquiries. The quoted price of RSS3 was $1,400 to$1,410 per ton. The spot price or CIF of STR20 was $1,180 to$1,185 per ton. The CIF of SMR20 in August was $1,205 per ton. The CIF of mixed rubber from Thailand in September was$1,215 per ton.

QinRex: Senior Vietnamese government officials said that in the face of falling rubber prices, it may be an option for rubber companies to turn rubber plantations into industrial land. Rubber plantations in Pingyang and Dong Nai have large areas, so rubber plantations have high M&A potential and can be transformed into industrial zones. In a latest report, Mirae Asset Securities of Vietnam estimated that it plans to convert more than 7,000 hectares of rubber land into industrial land.

The domestic latex production in Hainan production area is relatively low, and the factory's rush to purchase raw materials supports the upward quotation. Currently, the latex is reported to ¥11,500 per ton, and the finished bulk concentrated latex is reported to be ¥8,600 to ¥8,700 per ton. The tire production line started steadily, and the replacement market and export market were hard to improve, resulting in a cumulative inventory of finished products. The tire price policy has not heard of new adjustments.

Futures Operation Advice: The SHFE rubber fluctuated like the trend of chemical futures. The main NR07 contract rebounded at bottom, and it is advised to pay attention to the support at the previous high level in April.

(For reference only)