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Daily Market Review on Specified Futures Products 2020.07.14

Fang submitted 2020-07-14 09:38:37

Crude oil

At present, the focus of the crude oil market is still on the ministerial video conference tomorrow. Judging from various positions, there is basically no sign of extending the current scale of production cuts. We expect the benchmark situation of the conference results to be to reduce production to 7.7 million barrels per day. It can be seen that the production increase of the Production Limitation Alliance is not the only factor affecting the supply. The demand for crude oil direct-fired power generation in the Middle East and the production of Libya and Venezuela also affect the overall output of OPEC. If Libya maintains the current situation of force majeure in exports, the output of crude oil in the Middle East + Venezuela will decline Offset about 1 million barrels per day, then the impact of OPEC+ actual production increase is about 1 million barrels per day. Because the demand for crude oil is also increasing, this part of the increase in production may not necessarily reverse the current tight crude oil market pattern, and it is necessary to focus on crude oil premiums and monthly differences. In terms of operation, it is advised to maintain the neutral strategy.

Iron Ore

The position on I2009 contract decreased by 2,455 lots and closed at ¥837.5 per ton, the position on I2101 contract increased by 303 lots and closed at ¥747.5 per ton.

Important Information

1. The total arrival volume of 45 ports in China reached 23.445 million tons, a decrease of 656,000 tons from the previous month; the total arrival volume of the six ports in the north was 13.425 million tons, an increase of 972,000 tons from the previous month. The total of 26 ports across the country reached 22.15 million tons, a decrease of 922,000 tons from the previous month.
2. Statistics from the Central Plains Real Estate Research Center show that as of July 13, 2020, the national land market continues to heat up, especially in Hangzhou, Shenzhen, Guangzhou, Beijing and other cities where high-priced land continues to appear, and housing companies are actively taking land.
The average land premium rate of first- and second-tier cities in 2020 reached 12.65%, the highest point in the past three years.

3. In terms of spot, the PB powder in Rizhao Port is ¥835 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥888 per ton.

Trading Strategy

1. Arbitrage: This week, shipments in Australia and Brazil continued to decline, supply pressures continued to ease, and the decline in pig iron was not yet obvious. Recently, construction materials sales have rebounded. It is necessary to continue to observe the demand for construction materials to recover after the rainy season. The rebound in demand will support pig iron production, and the downside of iron ore demand is currently limited. 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-780. (For reference only)


Overhaul reappears, but the rate of overhaul is still slow

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 40 or 0.38% and closed at 10,640, The main force contract of JRU10 rose by 1.7 or 1.10% and closed at 156.8. Yunnan WF closed at 10,400-10,500 yuan/ton, Hainan Whole Milk closed at 10,450 yuan/ton, the second landmark of production closed at 10,200 yuan/ton, and Thailand’s tobacco tablets closed at 12,750-12,850 yuan/ton.

About NR: The main force contract of NR09 rose by 60 or 0.68% and closed at 8,865. The main force contract of TF09 fell by 0.8 or 0.66% and closed at 120.8. 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 $1300 per ton. The CIF of mixed rubber from Thailand in December was $1310 per ton.

Qingdao Double Star Announcement: Qingdao Double Star expects net losses attributable to shareholders of listed companies in the first half of 2020 to be 40 million to 50 million yuan, with a profit of 29.646 million yuan in the same period last year; basic loss per share of 0.05 yuan to 0.06 yuan. The reasons are as follows: In the second quarter, domestic market orders increased significantly, domestic tire revenue increased by more than 100%, and the company's overall operating income increased by more than 50%, and the net profit attributable to shareholders of listed companies increased by more than 100%, achieving profitability. However, due to the impact of the epidemic in the first quarter, the overall profit in the first half of the year was still loss; in the second half of the year, the company will further implement the "three new" strategy and continue to innovate the marketing model. At the same time, the implementation of new overseas strategies will be accelerated, and future profitability will be further improved.

In terms of concentrated latex, domestic finished products have a price advantage over imported latex. In anticipation of the peak supply season, the market transaction center of gravity shifted downward. As of late June, Japan's TOCOM delivery inventory continued to accumulate 133 tons to 8976 tons, of which 487 tons were added to the warehouse, and 354 tons were reduced from the outbound. The shipment volume of tire production lines is not obvious.

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 early low of 10,520 points. (For reference only)

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