Last week, EIA and IEA released monthly reports, OPEC monthly reports have not yet been released. From the balance sheet, EIA and IEA have both revised up global demand growth and non-OPEC supply. However, the upward revision of demand is mainly due to the correction of demand in the second quarter, and the balance of supply and demand has also improved throughout the year. As in the previous month, both major organizations believe that the oil market will enter a stage of shortage in the third quarter.
Demand: The EIA estimates that the contraction in demand for 2020 will be 8.15 million barrels/day, up 360,000 barrels/day from the previous month, of which OECD repairs 500,000 barrels/day and non-OECD repairs 140,000 barrels/day. The IEA expects global demand to decline by 7.18 million barrels/day in 2020, up 360,000 barrels/day from the previous month. It is still from China, Europe and India, with repairs of 22, 17 and 110,000 barrels/day, respectively.
Non-OPEC supply: EIA expects non-OPEC supply to decline by 2.24 million barrels/day in 2020, up 320,000 barrels/day from last month’s estimate. The main repair countries are the United States and Brazil, with 200,000 barrels/day and 150,000 barrels per day. EIA expects US crude oil output to decline by 600,000 barrels/day this year, up 70,000 barrels/day from last month. IEA's non-OPEC supply is expected to decline by 2.98 million barrels/day in 2020, up 190,000 barrels/day from last month, and all major production areas around the world have slightly increased.
OPEC output: EIA caliber OPEC output fell by 1.6 million barrels/day to 22.71 million barrels/day in June, among which the countries with the largest declines were Saudi Arabia, Iraq and Nigeria, which decreased by 75, 50 and 150,000 barrels/day respectively. IEA caliber June OPEC output fell 1.9 million barrels per day to 22.19 million barrels per day, OPEC's overall compliance rate has reached 112%.
Call on OPEC: EIA's estimated COO for 2020 is 24.32 million barrels/day, up 80,000 barrels/day from the previous month. According to the EIA balance sheet, the difference between supply and demand in the first to fourth quarters is 5.5 million barrels/day, 7.9 million barrels/day, -3.4 million barrels/day, -3.1 million barrels/day. The IEA estimates that the COO in 2020 will be 24.22 million barrels/day, up 170,000 barrels/day from the previous month, and the COO will be 2180, 1640, 2820, and 30.4 million barrels/day in the first to fourth quarters.
In terms of operation, it is advised to maintain the neutral strategy.
The position on I2009 contract increased by 41,216 lots and closed at ¥820 per ton, the position on I2101 contract increased by 11,540 lots and closed at ¥731.5 per ton.
1. The latest statistics from the China Association of Automobile Manufacturers show that the production and sales of automobiles continued to pick up in June, with 2.325 million and 2.30 million vehicles completed, up 6.3% and 4.8% from the previous month, and up 22.5% and 11.6% from the same period last year. Production and sales reached a record high in the same month. In the first half of this year, China's automobile production and sales were 10.112 million and 10.257 million, respectively, a year-on-year decrease of 16.8% and 16.9% respectively. Compared with January to May, the declines were narrowed by 7.3 percentage points and 5.7 percentage points, better than expected.
2. The imported iron ore stocks of 45 ports nationwide are 10878.08, an increase of 69.33 compared with last week; the average daily port opening volume is 315.98, an increase of 0.60. In terms of weight, the Australian mine 5991.17 fell 157.83, the Brazilian mine 2386.40 increased 144.30, the trade mine 5371.00 increased 87.80, the pellet 899.69 increased 6.41, the refined powder 781.61 increased 42.93, the lump 2452.52 increased 50.04; the number of ships in port 142 decreased 5.
3. In terms of spot, the PB powder in Rizhao Port is ¥805 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥852 per ton.
1. Arbitrage: Last week, the overall inventory of the port was accumulated but the coarse powder was still falling. The decline in pig iron was not obvious. The sales of construction materials rebounded last week. It is necessary to continue to observe the recovery of construction material demand after the rainy season. The rebound in demand will support the production of pig iron. From the perspective of iron ore supply, the supply pressure is expected to ease after the end of the Australian impulse. The overall market is expected to run strongly, and 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)
The repair has not been fulfilled, and the downstream polyester has accumulated pressure and reduced the burden
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.
About RU: The main force contract of RU09 rose by 160 or 1.52% and closed at 10,655, The main force contract of JRU10 fell by 2.5 or 1.59% and closed at 155.1. Yunnan WF closed at 10,350-10,500 yuan/ton, Hainan Whole Milk closed at 10,400 yuan/ton, the second landmark of production closed at 10,200 yuan/ton, and Thailand’s tobacco tablets closed at 12,700-12,800 yuan/ton.
About NR: The main force contract of NR09 rose by 130 or 1.50% and closed at 8,805. The main force contract of TF09 closed at 121.6. The quoted price for Qingdao rubber in USD fell by $5-$10 per ton with general inquiries. The spot price or CIF of STR20 was $1,240 to $1,250 per ton. The CIF of SMR20 in November was $1290 per ton. The CIF of mixed rubber from Thailand in December was $1300 per ton.
According to data from the China Association of Automobile Manufacturers: In June, automobile production and sales were 2.325 million and 2.30 million, respectively, up 6.3% and 4.8% from the previous month, and up 22.5% and 11.6% from the same period last year. It is worth mentioning that this month's automobile production and sales have all set a new record high in June. From January to June, automobile production and sales completed 10.112 million units and 10.257 million units respectively, down 16.8% and 16.9% year-on-year. The decline continued to narrow, and the overall performance was better than expected.
Thailand's recent rainfall is normal, with an average daily rainfall of 6.65mm in early July, slightly lower than the historical average of 7.67mm. Due to the drought in the same period last year, if the current normal rainfall can continue, the year-on-year increase in cumulative rainfall may exceed the +55% alert value. As of late June, Japan's TOCOM cigarette delivery stocks accumulated 133 tons to 8976 tons, of which 487 tons were added to the warehouse, and 354 tons were reduced from the warehouse.
Futures Operation Advice: For the main force contract of RU09, it is advised to hold large volumes in short term and the stop loss should be set at the recent low. (For reference only)