The fragile balance of the crude oil market is being broken. China’s crude oil purchases have slowed since June. However, due to the decline in exports from Russia and the Middle East and the tight supply of Ural crude oil, European refineries have chosen to increase crude oil imports from the North Sea and the United States. In terms of the situation, the slowdown in China's procurement efforts has exceeded expectations, a large amount of Angolan crude oil is still on sale, superimposed on the increase in Ural crude oil cargo exports since August, and the direction of US crude oil exports to Europe. We believe that the problem of excess light oil in the Atlantic Basin will worsen. From the current cross-month spread of Brent crude oil and physical discounts have reflected this trend, the current crude oil fundamentals are developing in a weakening direction.
Strategy: Neutral and bearish relatively, Brent reverses, buys six lines and throws the first line
Risk: Supply disruption caused by sudden geopolitical events.
The position on I2009 contract increased by 4,928 lots and closed at ¥827 per ton, the position on I2101 contract increased by 854 lots and closed at ¥739.5 per ton.
1. According to foreign media reports, in the first half of 2020, the output of Central GOK pellets in Ukraine’s central mining area was 1.2 million tons, an increase of 1.4% year-on-year; the output of iron powder was 2.4 million tons, an increase of 12.2% year-on-year. In June, Gentral GOK pellets and The output of fine iron powder is 208,000 tons and 405,000 tons respectively.
2. The Ministry of Finance has decided to renew the issuance of the 2020 anti-epidemic special national debt (fourth phase) for the third time, and the bidding work has been completed. This time the national debt plans to continue issuance of 70 billion yuan, and the actual reissue of the face value of 70 billion yuan. As of July 28, 15 anti-epidemic special treasury bonds have been issued, with a total of 930 billion yuan, of which 200 billion yuan, 100 billion yuan, and 630 billion yuan have been issued for 5-year, 7-year, and 10-year terms. The Ministry of Finance recently issued an announcement stating that in order to raise financial funds and coordinate the promotion of epidemic prevention and control and economic and social development, it will renew the issuance of 70 billion anti-epidemic special treasury bonds (fourth phase) on July 30. This means that the 1 trillion yuan anti-epidemic special treasury bond will be issued at the end of the month.
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 ¥883 per ton.
1. Arbitrage: This week's 15 port stocks totaled 1.6 million tons, PB powder stocks were basically the same, and Jin Buba and Mike dropped slightly. There is little pressure on related stocks on the disk. The overall rigid demand for iron ore is still at a high level. The recent port inventory and port pressure have accumulated significantly, mainly due to the obvious pressure on arrival at ports. The pressure on arrival in Australia is expected to ease in the later period. However, it is expected that the overall inventory will hardly show a trend drop, and the accumulated pressure on the port in the early period is relatively high, and it may be reflected in the pressure on port inventory in the later period. On the whole, the spot market will turn from strong to weak. At present, the contradiction between the varieties has not been resolved. The gold bulla spot is still strong, and the price difference of PB gold bulla is also relatively large. The corresponding target of 09 is still strong, and there is still a certain basis for 09. It is advised to hold a slight position on long 01 hot rolled and short 01 iron ore. At the same time, some positions can be adjusted to cash and carry arbitrage on 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)
The production and sales of polyester are still weak, and a set of small devices in PTA will be overhauled
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.
RU: The main force contract of RU09 rose by 25 or 0.23% and closed at 10,715. The main force contract of JRU10 rose by 2.3 or 1.45% and closed at 160.5. 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 10,400 yuan/ton, and Thailand’s RSS3 closed at 12,900 to 12,950 yuan/ton.
NR: The main force contract of NR10 rose by 35 or 0.40% and closed at 8,875. The main force contract of TF10 fell by 0.4 or 0.33% closed at 121.5. The quoted price for Qingdao rubber in USD was adjusted slightly with few inquiries. The spot price or CIF of STR20 was $1,255 to $1265 per ton. The CIF of SMR20 in November was $1,290 per ton. The CIF of mixed rubber from Thailand in December was $1,305 to $1310 per ton.
News from Rubber Valley: Affected by the foreign epidemic, China's export of rubber additives will be greatly reduced in 2020. According to customs statistics, from January to June, China’s cumulative export volume of accelerators was 113,900 tons, a decrease of 9.33% over the same period last year; during the same period, China’s cumulative export volume of anti-aging agents was 97,000 tons, a decrease of 19.49% over the same period last year. China is a major producer of rubber additives. The output of additives accounts for about 75% of the global output of additives. A large number of additives from overseas countries are exported from China.
In terms of concentrated latex, the upstream supply peak season is superimposed on the domestic summer demand low season, and the market price is under pressure. Vietnam latex with price advantage is favored. The multi-caliber statistics of the Qingdao Free Trade Zone's off-site inventory is about 680,000 tons, and the accumulation range is between 1.3% and 2.0%.
Futures Operation Advice: The main contract is rolling soon. 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).