Crude Oil

According to Russia’s August Ural crude oil shipment plan, the volume of cargo exported from the Black Sea and Baltic Sea in August increased significantly to 1.11 million barrels per day, an increase of 42% from the 785,000 barrels per day in July. Russia’s increase in crude oil exports exceeds previous market expectations. Russia’s previous signal to the market was that the increase in its output will meet its own domestic demand and that the export volume will not increase. However, from the perspective of the shipment plan, this is not the case. Crude oil exports from oil countries have also increased sharply since August, so the current global crude oil supply tension will ease, and the slowdown in Chinese demand will also have a double blow to the oil market. If the logic is changed, oil prices will fall again.

Strategy: Neutral and bearish relatively, no strategy suggestion yet

Risk: Supply disruption caused by geopolitical events.

Iron Ore

The position on I2009 contract decreased by 2,520 lots and closed at ¥816.5 per ton, the position on I2101 contract decreased by 826 lots and closed at ¥731.5 per ton.

【Important Information】

1. According to the latest data released by the National Bureau of Statistics compiled by the China Association of Automobile Manufacturers, from January to June 2020, the automobile manufacturing industry achieved a profit of 190.42 billion yuan, a year-on-year decrease of 20.7%. The rate of decline narrowed by 12.8 percentage points from January to May and 4.2 percentage points from the same period last year, accounting for 7.6% of the total profits realized by industrial enterprises above designated size, 1.1 percentage points higher than from January to May, but still lower than the same period.

2. According to data from the National Bureau of Statistics, from January to June, the national ferrous metal smelting and rolling processing industry (steel industry) achieved operating income of 3186.04 billion yuan, a year-on-year decrease of 3.8%, and the rate of decline narrowed by 2.2 percentage points from the previous five months. From January to June, the steel industry achieved a total profit of 84.08 billion yuan, a year-on-year decrease of 40.3%, and the rate of decline narrowed by 16.9 percentage points from the previous five months.

3. In terms of spot, the PB powder in Rizhao Port is ¥830 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥875 per ton.

【Trading Strategy】

1. Arbitrage: Shipments from Australia continued to drop slightly this week. Brazil has rebounded to a certain extent. The overall fluctuation is not significant. The recent port inventory and port pressure have accumulated significantly. The overall rigid demand for iron ore is still high. The pressure on arrival in Australia is expected to ease in the future. However, due to the relatively high cumulative port pressure in the previous period, it is expected that the port inventory will not decline significantly when the port pressure has eased, and the current price gap between card powder and PB has narrowed. The upward drive of the spot is weakened, it is advised to hold a slight position on long 01 hot rolled and short 01 iron ore.

2. Option strategy: The upward drive of iron ore has weakened, but there is still a certain margin in the near-month contract. It is recommended to sell I2009-P-780. (For reference only)

PTA

Polyester production and sales have fallen again, and there is no continuous recovery in the terminal.

In the context of PTA still having processing profits, the possibility of additional overhaul at Yisheng is uncertain. The inventory will accumulate if the overhaul doesn’t happen, and will not accumulate if it happens, while the inventory still remains at high level. In terms of the unilateral strategy, it is expected to fall gradually; for the strategy across varieties, it is estimated that possibility of overhaul of PTA in August is still large. 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, the 9-1 reverse cash and carry strategy was under pressure and close to the rolling window at -200. 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

RU: The main force contract of RU09 rose by 30 or 0.28% and closed at 10,700. The main force contract of JRU10 rose by 0.6 or 0.38% and closed at 158.8. Yunnan WF closed at 10,550 to 10,600 yuan/ton, Hainan SCRWF closed at 10,600 yuan/ton, the second standard rubber closed at 10,350 yuan/ton, and Thailand’s RSS3 closed at 12,900 to 12,950 yuan/ton.

NR: The main force contract of NR10 rose by 50 or 0.57% and closed at 8,805. The main force contract of TF10 rose by 0.9 or 0.74% closed at 121.9. The quoted price for Qingdao rubber in USD rose slightly by $5 to $10 per ton with normal inquiries. The spot price or CIF of STR20 was $1,255 per ton. The CIF of SMR20 in November was $1,295 to $1,300 per ton. The CIF of mixed rubber from Thailand in December was $1,310 per ton.

First Commercial Vehicle Network: From January to June, the cumulative sales volume of China's heavy-duty truck market set a new global record again, reaching 816,200 vehicles, a year-on-year increase of 24%. Among them, the sales volume of Guoliu Heavy Truck exceeded 100,000, reaching 108,400, accounting for 13% of the overall sales of the heavy truck market. Among them, the cumulative sales of National VI natural gas heavy trucks from January to June were 78,300, and the cumulative sales of National VI diesel heavy trucks exceeded 30,000 (the sales caliber of the traffic compulsory insurance terminal). Therefore, it can be said that natural gas heavy trucks are the key to driving the country's six heavy trucks to break 100,000.

In the domestic Hainan area, the price of glue for thick latex is 10,300 yuan/ton, and it is heard that the price of all latex is 9,600 yuan/ton. Yunnan glue closed at 9700-10000 yuan/ton, which was the same as the quotation in Hainan and was relatively overvalued. In terms of synthetic rubber, butadiene stabilized and strengthened, boosting market confidence in finished styrene butadiene and butadiene products.

Futures Operation Advice: The main contract is rolling. For the sub-main RU01 contract, it is advised to long it and set a stop loss at the previous high of 11,760 points. (For reference only).