Crude oil

API released inventory data yesterday, in which crude oil inventories increased, refined oil inventories fell, and the decline was greater than market expectations. This is a gratifying signal for the oil market. As demand recovers, the recent refined oil in the US region, from the indicators of inventory and spot premium both have improved, and refinery profits have also been repaired. However, there is still a long way to go before the normalization of global refined oil inventories, especially coal for middle distillates. It is not only the sluggish processing profits that restricts the operating rate of refineries, but also the inconsistency of the recovery rate of different products. The recovery of demand for kerosene and diesel is slower than that of gasoline and naphtha. This poses a great challenge to the refinery to adjust its product structure and increase the overall operating rate.

In terms of operation, it is advised to be cautious about short strategy and hold short strategy. The risk lies in geopolitical premium return.

Iron Ore

The position on I2009 contract decreased by 16,195 lots and closed at ¥759 per ton, the position on I2101 contract increased by 853 lots and closed at ¥684 per ton.

【Important Information】

1. According to foreign media reports, the US Hibbing Taconite Mining Company postponed the restart of its pellet plant and concentrator until August. Hibbing Taconite is a joint venture between ArcelorMittal, Cleveland-Cliffs and American Steel Corporation, with an annual iron ore production capacity of approximately 29 million tons and pellets annual production capacity of approximately 7.8 million tons.
2. On June 23, the Ministry of Transport held a regular press conference in June. Spokesperson Sun Wenjian said that in May, the investment in fixed assets of transportation was 343.3 billion yuan, an increase of 27% year-on-year, and the growth rate was 8.9% faster than in April. From January to May, the investment in fixed assets of transportation was 1022.3 billion yuan, an increase of 0.9% year-on-year. The cumulative growth rate for the first time this year has achieved growth, indicating that the transportation investment gap caused by the epidemic has been initially filled.
3. According to Mysteel, this week (June 22-June 28) Australia and Brazil have some iron ore shipping berths for maintenance, and the estimated impacts are about 680,000 tons and 500,000 tons, respectively; compared with last week, affected shipments decreased by about 520,000 tons.

4. In terms of spot, the PB powder in Rizhao Port is ¥770 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥820 per ton.

【Trading Strategy】

1. Arbitrage: The stocks of 15 ports have decreased by 630,000 tons this week, and the stocks of ports still have a slight decline. Recently, the apparent demand for building materials has fallen sharply, and the seasonal demand has declined significantly. Later, it may affect pig iron production. The short-term upward driving of iron ore spot has weakened, but the current basis of the 09 contract is still relatively large. At present, shipment volume in Australia increased normally, and Brazilian shipments are still low. The supply pressure will be reduced after the seasonal decline in Australian shipments in July. It is recommended to wait and see in the short term.

2. The short-term spot upward drive is weakened, but the basis is still large. It is recommended to wait and see. (For reference only)

PTA

PTA basis dropped again. Under the background of waiting for the next round of PTA maintenance and fulfillment and polyester price reduction promotion, polyester production and sales picked up

Prospects of the balance sheet: follow-up maintenance expectations and large swings in production, two separate hypothesis estimates. (1) The maintenance of Yisheng, Tongkun and Zhongtai did not materialize, and Hengli 5# went to normal production in July. It went to the warehouse in June and quickly accumulated in July-August. (2) Yisheng, Tongkun and Zhongtai were overhauled in July-August, Hengli 5# went to normal production in July. It went to the warehouse in June, and accumulated again in July-August. At present, the profit of PTA processing is relatively high, and it pays attention to the status of the overhaul of major factories. In terms of operation, it is advised to wait and see for unilateral strategy; for the strategy across varieties, it is estimated that PTA in June to July will remove a small amount of warehouse, and cross-variety will be slightly stronger; for strategy across period, Yisheng Tongkun's maintenance expectations in July-August assume that the inventory level after de-stocking is still high, the warehouse receipt pressure is still there, and maintains expectations of selling 2009 and buying 2101; however, the profit of PTA processing is gradually lowering, and the follow-up passive overhaul will be carefully guarded against. It is advised to wait and see, as well as focus on the risks of the downstream restocking space and the demand recovery rate of the external market.

Natural Rubber

Overseas rubber retreated. The main force contract of TF09 fell by 0.1 or 0.08% and closed at 120.8. The main force contract of JRU10 fell by 0.3 or 0.19% and closed at 157.5. The SHFE rubber fluctuated slightly. The main force contract of RU09 rose by 35 or 0.34% and closed at 10,385, and the main force contract of NR09 rose by 60 or 0.68% and closed at 8,820. The quoted price for Qingdao rubber in USD was narrowed by $5 to $10 with general inquiries. The quoted price of RSS3 was $1,410 per ton. The spot price or CIF of STR20 was $1,250 to $1,260 per ton. The CIF of SMR20 in August was $1270 per ton. The CIF of mixed rubber from Thailand in October was $1295 per ton.

QinRex News: Thai rubber glove manufacturer Sri Trang glows (STGT) said in a document on Monday that the company plans to raise an initial public offering (IPO) of 14.9 billion baht ($48034 million). This was the largest IPO in Thailand during the COVID-19 outbreak. In the three months to March, the company achieved revenue of 3.79 billion baht, an increase of 25% from 2.98 billion baht in the same period last year. The main reason for the increase is that the sales of rubber gloves reached 6.2 billion pieces, an increase of 28.7% over the same period last year, so did the new production lines and factories in southern Thailand.

The supply of the latex market is still tight, and offers are recovering tentatively. The supply volume was not as expected, and prices remained firm. According to third-party statistics, the inventory outside Qingdao Free Trade Zone increased by about 1.2% month-on-month, with a scale of about 650,000 tons. There are differences in the operation of tires. Good exports, stable start-up, general export, and start-up pressure have all appeared among different brands.

Futures Operation Advice: The SHFE rubber fluctuated slightly. As for the main RU09 contract, it is advised to hold multiple contracts with small volumes. As the Dragon Boat Festival is approaching, it is advised to control exposure risk at hand. (For reference only)