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Daily Market Review on Specified Futures Products 2020.07.16

Fang submitted 2020-07-16 09:42:12

Crude oil

The results of the OPEC+ meeting yesterday were more similar to our previous estimates. OPEC eased the scale of production cuts, but due to some cheating countries making up for the production cuts, the scale of production cuts after offsetting was about 8 to 8.5 million barrels per day. Countries such as Russia plan to increase production from August, but both Saudi Arabia and Russia have mentioned that crude oil exports do not increase. This is equivalent to taking a pill for the market, which means that the oil-producing countries may have their own demand growth or the demand for replenishment of the stock also hedge some of the output growth. As far as the market is concerned, the overall supply of the production-limiting alliance is still tight, which shows that the primary goal of the Saudi and Russian policies is to limit production and protect the price to destock, rather than rush to expand market share. In terms of operation, it is advised to maintain the neutral strategy.

Iron Ore

The position on I2009 contract decreased by 14,619 lots and closed at ¥832.5 per ton, the position on I2101 contract decreased by 4,169 lots and closed at ¥743.5 per ton.

Important Information

1. This week, 10 sample steel mills in Tangshan area have an average hot metal-free cost of 2275 yuan/ton, and the average billet tax cost is 2991 yuan/ton, which is an increase of 15 yuan/ton compared with the current week. Compared with the ex-factory price of 3400 yuan/ton, the average gross profit of steel mills is about 409 yuan/ton, and the weekly increase is 15 yuan/ton.

2. According to Mysteel, some iron ore shipping berths in Australia and Brazil were inspected and maintained this week (July 13-July 19). In Australia, the Port of Gilarton is affected by the waves, and the No. 5 berth for iron ore shipment will be closed. The estimated impact is 66,000 tons, which is 1.3 million tons less than last week. On the Brazilian side, berths have been repaired in the ports of Madeira, Tubarao and Rio de Janeiro. The impact is expected to be 2 million tons, an increase of 500,000 tons from the previous week. Among them, the overhaul of the Port of Rio de Janeiro is relatively strong. The overhaul of the GIT berth continues this week. The seven-day continuous overhaul is expected to have an impact of 700,000 tons. In addition, the overhaul of the CSN berth will also begin this Wednesday (July 15). Until the end of July, this week's impact is expected to be 400,000 tons.

3. On July 16, the freight rate from Brazil to China was US$18.0/ton, down US$0.6/ton (15-18 million tons); the freight rate from Western Australia to China was US$7.9/ton, down US$0.4/ton; from South Africa to China was 14 -15 USD/ton (15-18 million tons); from Iran to China was 25-26 USD/ton (2-30000 tons)

4. In terms of spot, the PB powder in Rizhao Port is ¥838 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥896 per ton.

Trading Strategy

1. Arbitrage: This week, stocks at Port 15 increased by 260,000 tons, and powder ore stocks increased by 440,000 tons. Stocks accumulated slightly. Recently, shipments in Australia and Brazil have declined. Supply pressures continue to ease. The decline in pig iron is not yet obvious. It is necessary to continue to observe the strength of the recovery of demand for building materials after the rainy season. The rebound in demand will support the production of pig iron. The downside of iron ore demand may be limited. The spot is expected to run strongly, and the basis is still 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)


Polyester production and sales fell again, continued loss of polyester still has negative pressure

In the context of PTA still having processing profits, the possibility of additional overhauls at Yisheng and Tongkun has decreased, combined with the reduction in polyester production, which quickly accumulated in July to August. 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 fell by 75 or 0.70% and closed at 10,565, The main force contract of JRU10 rose by 0.2 or 0.13% and closed at 156.5. Yunnan WF closed at 10,350-10,500 yuan/ton, Hainan Whole Milk closed at 10,450 yuan/ton, the second landmark of production closed at 10,100 yuan/ton, and Thailand’s tobacco tablets closed at 12,700-12,850 yuan/ton.

About NR: The main force contract of NR09 fell by 60 or 0.68% and closed at 8,815. The main force contract of TF09 rose by 0.2 or 0.17% closed at 120.2. The quoted price for Qingdao rubber in USD remained stable with general inquiries. The spot price or CIF of STR20 was $1,250 to $1,265 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.

China Rubber Magazine News: In order to meet market demand, Chongqing Hantai Tire Co., Ltd. decided to add a self-healing layer coating production line. Upon completion, it will form an annual production capacity of 924,000 self-healing PCR tires. The total investment of the project is 164 million yuan, which is planned to be implemented in four phases. The first, second, and third phases have the same capacity, which is 1/5 of the total capacity (184.8 thousand), and the fourth phase is 2/5 (360.96 million) of the total capacity. The first-phase project is expected to be put into operation in 2021, and the fourth-phase project will be put into operation in 2024.

Hainan glue continued to fall to the normal range of 10,100-10,200 yuan/ton, and the premium of Yunnan glue was 200-300 yuan/ton. The premium has been in line with the finished premium latex delivery premium. At the close today, the margin ratio of the RU contract and the NR contract will be reduced from 11% to 8%, and the price limit will be reduced from ±9% to ±6%. This move is expected to increase volatility. In addition to focusing on the call strategy, the scope of the profit and loss can be appropriately expanded in the position at hand.

Futures Operation Advice: The main change of the month is imminent. It is advised to wait and see for the main force contract of RU09, and pay attention to the support at the near-end 10,530 lows (For reference only).

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