Crude oil

Yesterday EIA announced inventory data. Among them, crude oil inventories fell by about 7.4 million barrels, which exceeded market expectations. However, from the perspective of the decline in inventory, net imports increased and refinery operating rates remained stable. The source of the decline was mainly balance sheet adjustment items. The weekly adjustment item is as high as -650,000 barrels/day, indicating that EIA’s weekly crude oil production data is overestimated and may need to be revised down in the near future. Judging from the May production data published in the July PSM monthly report, May production is compared to April. A drop of 2 million barrels per day to 10 million barrels per day. This drop is beyond market expectations and also deviates from the weekly output data of EIA. However, we believe this is only an adjustment at the data level. From the actual situation, Recently, the number of drilling rigs and fracturing units in the United States has bottomed out, and the production cuts from April to May will gradually return in the near future. Therefore, from a marginal point of view, the actual U.S. crude oil production trend is recovering from the bottom.
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 5,329 lots and closed at ¥907.5 per ton, the position on I2101 contract increased by 13,195 lots and closed at ¥819 per ton.

【Important Information】

1. According to the CPCA, the average daily retail sales in the fifth week of July was 94,000 units, an increase of 9% year-on-year and a decrease of 8% from the same period in June. Due to the fact that some manufacturers took high-temperature vacations this week, data collection is slow, and it is difficult to make accurate judgments on the growth rate. It is currently estimated that the retail sales of major manufacturers in July will increase by 6% year-on-year and decrease by 6% month-on-month.

2. Japan's three major auto companies have all increased their sales in China in July, showing that the world's largest auto market is continuing to recover. Nissan said on Wednesday that its sales in China in July rose 11.6% year-on-year to 120,945 vehicles. Honda said that July sales in China increased by 17.8% to 136,646 vehicles. The previous day Toyota reported that China's sales in July increased by 19.1% to 165,600 vehicles, of which the high-end brand Lexus sales soared 38.6% to 22,300 vehicles.

3. In terms of spot, the PB powder in Rizhao Port is ¥887 per ton, and the golden bubba in Rizhao Port is equivalent to ¥932 per ton.

【Trading Strategy】

1. Arbitrage: Data released by Zhaogang shows that the overall output of building materials has declined, the inventory has dropped significantly, the overall demand needs to be improved significantly, and the output of the plate end has increased. The demand for building materials is gradually fulfilling the expectations. At present, the demand for iron ore remains high. The structural contradiction has not been resolved, the gold Bubba inventory is still declining, the price difference between PB and gold Bubba is still relatively large, and the market standard is still strong. It is recommended to maintain the 9-1 iron ore cash and carry arbitrage strategy.

2. Option strategy: The futures is still relatively strong. It is recommended to sell I2009-P-870. (For reference only)

Natural Rubber

RU: The main force contract of RU01 rose by 15 or 0.12% and closed at 12,205. The main force contract of JRU01 rose by 2.5 or 1.50% and closed at 169.7. Yunnan WF closed at 10,650 to 10,800 yuan per ton, Hainan SCRWF closed at 10,700 yuan per ton, the second standard rubber closed at 10,500 yuan per ton, and Thailand’s RSS3 closed at 13,100 to 13,150 yuan per ton.

NR: The main force contract of NR10 rose by 75 or 0.83% and closed at 9,100. The main force contract of TF12 rose by 1.4 or 1.09% closed at 129.7. The quoted price for Qingdao rubber in USD rebounded by $5 to $20 per ton with general inquiries. The spot price or CIF of STR20 was $1,290 to $1,295 per ton. The CIF of SMR20 in November was $1,310 to $1,320 per ton. The CIF of mixed rubber from Thailand in December was $1,315 to $1,340 per ton.

CAAM News: According to the statistics of the China Association of Automobile Manufacturers, the sales volume of the automobile industry in July is estimated to be 2.08 million, a decrease of 9.6% from the previous month and an increase of 14.9% from the same period last year. Passenger vehicles increased by 5.3% year-on-year, and commercial vehicles increased by 59.6%. From January to July, the cumulative sales of the automotive industry are estimated to be 12.34 million, a year-on-year decrease of 12.7%; in terms of vehicle models, passenger vehicles fell 18.6% year-on-year, and commercial vehicles increased by 14.3% year-on-year.

In terms of synthetic rubber raw materials, butadiene fell weakly, Liaoyang Petrochemical and Hengli lowered their ex-factory prices to stimulate transactions. In anticipation of the increase in near-end supply, terminal access is limited. Japan’s TOCOM inventory has not yet been updated. Car sales in July are expected to increase by 14.9% year-on-year, and production should also be of a considerable magnitude, but the year-on-year growth rate has narrowed compared to June.

Futures Operation Advice: For the long position on the main RU01 contract, it is advised to stop profit, and focus on the support at the previous high level. (For reference only).