Crude oil

Oil prices fell sharply yesterday. From the news side, Libyan news may be a potential fuse. According to Bloomberg reports, the Libyan port guards allow an Afra tanker to load crude oil at the Es Sider terminal. The port of Es Sider is one of Libya’s largest crude oil terminals. This news was interpreted as a signal for the recovery of Libya’s exports. However, the Libyan National Petroleum Corporation has not yet lifted the force majeure clause. At present, the resumption of production in Libya is still highly uncertain. There is still no agreement on the distribution of oil revenue between the domestic GNA and LNA, but the reason why Libya has a greater impact on the recent oil market is mainly because the current supply and demand are in a fragile balance. Once there is power to break this balance, oil prices will face directional choices. In terms of operation, it is advised to maintain the neutral strategy.

Iron Ore

The position on I2009 contract increased by 1,091 lots and closed at ¥786.5 per ton, the position on I2101 contract increased by 2,333 lots and closed at ¥709.5 per ton.

【Important Information】

1. The latest data released by the Australian Pilbara Port Authority (PPA) shows that the largest iron ore export port in Australia and the world-Port Hedland, in June, both iron ore exports and exports to China have created double A record high. Data show that the port's iron ore exports exceeded 50 million tons for the first time in June, reaching a record high of 51.794 million tons, an increase of 2.857 million tons, or 5.8%, from the previous high of 48.937 million tons in June last year.
2. According to industry statistics of the China Construction Machinery Industry Association, the 25 mainframe manufacturing companies included in the statistics from January to June 2020 sold a total of 170,425 sets of various types of excavation machinery products, a year-on-year increase of 24.2%. The domestic market sold 155,893 units, a year-on-year increase of 24.8%. The export sales volume was 14,532 units, a year-on-year increase of 17.8%. In June 2020, a total of 24,625 excavating machinery products were sold, a year-on-year increase of 62.9%. The domestic market sold 21,724 units, a year-on-year increase of 74.8%. Export sales were 2901 units, a year-on-year increase of 7.6%.

3. In terms of spot, the PB powder in Rizhao Port is ¥800 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥851 per ton.

【Trading Strategy】

1. Arbitrage: This week, the overall inventory of the port has accumulated slightly, reducing the port pressure by 5. The overall inventory is basically flat, and the contradiction between the varieties is still outstanding. The overall inventory of the port is accumulating but the powder ore is still falling. The pig iron is slightly reduced and the port is basically stable. Recently, the sales of construction materials have rebounded, and the demand has shown signs of recovery. It is necessary to continue to observe the recovery of demand after the rainy season. The supply pressure of iron ore is expected to ease after the end of the Australian impulse, and the range of iron ore discount is still relatively large. It is recommended to cash and carry arbitrage on 2101-2105.

2. Option strategy: It is recommended to consider selling 2009 put options, that is I2009-P-750. (For reference only)

PTA

Polyester production and sales fell again, polyester inventory pressure dragged down TA demand.

Prospects of the balance sheet: Under the background that PTA still has processing profits, the possibility of additional overhauls at Yisheng and Tongkun has decreased. Combined with the reduction of polyester production, it will remove the warehouse in June and accumulate quickly in July. 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 July will accumulate a small amount of warehouse. The performance of the cross-species may be weak, but the willingness of the upstream factory to maintain and control should still be judged based on the change in processing fees; for strategy across period, Yisheng Tongkun's July-August maintenance assumptions are still high after cashing. The warehouse receipt pressure is still there, and maintains expectations of selling 2009 and buying 2101. It is advised to wait and see, as well as focus on PTA factory inspection and fulfillment wishes of July to August, and the downstream restocking space.

Natural Rubber

About RU: The main force contract of RU09 rose by 175 or 1.64% and closed at 10,515, The main force contract of JRU10 rose by 0.4 or 0.25% and closed at 157.6. Yunnan WF closed at 10,500-10,600 yuan/ton, Hainan Whole Milk closed at 10,550 yuan/ton, the second landmark of production closed at 10,250 yuan/ton, and Thailand’s tobacco tablets closed at 12,800-12,950 yuan/ton.

About NR: The main force contract of NR09 fell by 90 or 1.02% and closed at 8,750. The main force contract of TF09 rose by 0.4 or 0.33% and closed at 121.6. The quoted price for Qingdao rubber in USD rose slightly by $5-$10 per ton with general inquiries. The spot price or CIF of STR20 was $1,250 to $1,260 per ton. The CIF of SMR20 in November was $1290 to $1295 per ton. The CIF of mixed rubber from Thailand in November was $1310 per ton.

The Federation of Passenger Carriers: National sales of passenger cars (cars, SUVs, MPVs) in the narrow sense were 1.654 million units in June, a year-on-year decrease of 6.2% and a month-on-month increase of 2.9%. Sales from March to June continued to increase sequentially; The cumulative sales volume was 7.704 million units, which was a 22.5% year-on-year decrease from the 9.945 million units in the same period last year. In terms of specific models, June car sales were 799,000 units, down 9.8% year-on-year; SUV sales were 766,000 units, up 1.2% year-on-year; MPV sales were 89,000 units, down 26.9% year-on-year.

In terms of concentrated latex, the spot market is tight, but the expected increase in supply makes the terminal more cautious. The loose prices of domestic thick milk and Vietnamese thick milk have an impact on Thai thick milk. According to the latest Zhuo Chuang statistics, the domestic all-steel operating rate is 68.3%, the week-on-week (relative) production increase is 3.4%, and the year-on-year (relative) production decrease is 9.3%. The production line is preparing for the off-season of high-temperature processing. The month-on-month decline in operating rate continued to narrow slightly.

Futures Operation Advice: For the main force contract of RU09, it is advised to wait and see, and pay attention to the support strength at the recent low.