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Daily Market Review on Specified Futures Products 2020.07.30

Fang submitted 2020-07-30 10:28:06

Crude oil

Yesterday EIA released weekly data. Among them, crude oil inventories fell more than expected, which was mainly driven by a decline in imports. However, refined oil inventories were still slow to degas, and gasoline and distillate inventories increased, which to a certain extent restricted the recovery of refinery operating rates. The plant operating rate is still maintained at about 80%. The current epidemic in the United States is still serious, but fortunately, the proportion of severely ill patients is currently low. There has not been a run on medical resources in several severely infected states. Therefore, the probability of another city closure in the United States Low, but the severe epidemic still affects people’s willingness to travel, and the recovery of U.S. refined oil consumption is very slow.Strategy: Neutral and bearish relatively, reverse cash and carry arbitrage strategy on Brent, long the sixth lines and short the first line

Risk: Supply disruption caused by sudden geopolitical events.

Iron Ore

The position on I2009 contract decreased by 15,037 lots and closed at ¥834.5 per ton, the position on I2101 contract increased by 6,171 lots and closed at ¥749 per ton.

Important Information

1. Champion Iron, a Canadian mining company, released its financial and operating report for the second quarter of 2020 (corresponding to the Canadian fiscal year Q1 2021). The report shows: In terms of output: in the second quarter of 2020, the company's high-grade iron powder output reached 1.80 million tons (wet ton), a year-on-year decrease of 9.6%. Sales volume: In the second quarter of 2020, the sales of refined iron powder reached 1.76 million tons (dry tons), a year-on-year decrease of 7.8%;

2. According to the Ministry of Iron and Steel of India, the latest data released by the Ministry showed that in June, the country's crude steel output was 6.8 million tons, an increase of 17.7% from the previous month, but it was still down 27.2% compared with the same period last year. It pointed out that due to the spread of the new coronavirus epidemic and nationwide lockdown measures, the country's economic activity reached its lowest point in April 2020 and began to show signs of improvement in May.

3. In June, domestic billet imports were 2.484 million tons, up 2237.4% year-on-year, a record high since statistical data. The weak overseas demand has led to a large number of billet exports to China.

4. In terms of spot, the PB powder in Rizhao Port is ¥845 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥896 per ton.

Trading Strategy

1. Arbitrage: Data by Zhaogang shows that steel inventory has gradually narrowed, building materials production has also increased slightly, and the demand has improved. The steel inventory of golden bubba is still falling slightly, PB inventory has begun to accumulate, and the inventory of six northern ports has increased by 2.5 million tons. The overall rigid demand for iron ore is still at a high level. The pressure on arrivals in Australia is expected to ease in the near future, and the overall inventory pressure is expected to decrease. However, the cumulative pressure on the port in the early period is relatively high, which may be reflected in the pressure on port inventory in the later period. At present, the contradiction between the varieties has not been resolved. The gold bubba spot is still strong, and the price difference between golden bubba and PB is also large. The corresponding target of the 09 contract is still strong, and there is still a certain basis difference in the 09 contract. It is recommended to hold a slight position on 9-1 cash and carry arbitrage strategy.

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, there is still no obvious additional overhaul. 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 advised to be neutral and bearish relatively; 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 205 or 1.89% and closed at 11,060. The main force contract of JRU12 rose by 0.8 or 0.50% and closed at 161.3. Yunnan WF closed at 10,600 to 10,650 yuan per ton, Hainan SCRWF closed at 10,600 yuan per ton, the second standard rubber closed at 10,400 yuan per ton, and Thailand’s RSS3 closed at 12,950 to 13,000 yuan/ton.

NR: The main force contract of NR10 rose by 120 or 1.33% and closed at 9,110. The main force contract of TF10 rose by 1.9 or 1.56% closed at 123.4. The quoted price for Qingdao rubber in USD rebounded by $20 to $30 per ton with normal inquiries. The spot price or CIF of STR20 was $1,285 per ton. The CIF of SMR20 in November was $1,310 per ton. The CIF of mixed rubber from Thailand in December was $1,320 per ton.

Citing TireWorld News: On July 27, the Michelin Group announced the first half of 2020 earnings. Its revenue fell 78% year-on-year to $387 million. In the same period last year, this data was 1.68 billion US dollars. Sales fell by 20.6% to $10.97 billion; total product sales fell by 22.4%. During the reporting period, the group had a net loss of $160.7 million, compared with a profit of $990 million in the same period last year. Michelin said that despite the increased costs and decreased demand caused by the epidemic, the company's financial situation is sound despite its poor performance.

In terms of synthetic rubber, the price of latex polystyrene butadiene rubber is gradually rising due to the cost support brought by the upward price of butadiene. Since the close of the market on the 28th: All NR contract positions have dropped slightly from 35,600 to 34,300; but all RU contracts have accumulated 44,800 lots or 15.5%, and the margin of position is at the forefront of commodities, which is attracting capital attention.

Futures Operation Advice: The main contract is about to finish rolling. For the sub-main RU01 contract, it is advised to partially stop profit and focus on the pressure at the recent high level.

(For reference only)

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