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Daily Market Review on Specified Futures Products 2020.08.11

Fang submitted 2020-08-11 09:50:16

Crude Oil

Recently, there have been new trends in China’s crude oil demand. Although it cannot be clearly confirmed, news from different sources indicates that the Ministry of Commerce may issue new crude oil import quotas to private refineries in the second half of the year (there is another saying that PetroChina has increased crude oil purchases. Then resell to the local refinery through domestic trade). Previously, the Energy Bureau also held a discussion at the Shandong refinery to discuss the feasibility of increasing quotas for the refinery but need to establish a 35-day forward inventory. All current information points to the hope from the government. The country's ability to continue to increase crude oil imports in half a year may be to accelerate the implementation of the first phase of the Sino-US economic and trade agreement (currently, the amount of energy imports is far from reaching the target). We think this may become the subject of recent bullish speculation. However, the biggest problem at present is still the excessive overbought of domestic crude oil in the first half of the year, resulting in tight port storage capacity. If the government takes the lead in increasing imports, it may be necessary to build new storage capacity to speed up production. According to Energy Aspect statistics, a large number of new crude oil storage projects are indeed put into operation in the second half of this year, of which commercial reserves are about 75 million barrels and strategic reserves are about 30 million barrels. The question is whether there is enough time. These projects may not be able to inject oil as soon as they are put into production. We believe that there are still several major bottlenecks in achieving import quotas higher than usage quotas. In addition to seeking breakthroughs in policy, infrastructure must also keep up. But in general, the development of this event deserves close attention in the future.

Strategy: Neutral and bearish relatively, Brent reverses, buys six lines and throws the first line

Risk: Supply disruption caused by sudden geopolitical events (The first line is the first contract to expire, the other five lines and so on). USD has depreciated sharply.

Iron Ore

The position on I2009 contract decreased by 13,005 lots and closed at ¥905.5 per ton, the position on I2101 contract increased by 36,148 lots and closed at ¥841 per ton.

Important Information

1. Shanghai Steel Union: On August 10, Mysteel's total inventory of 45 ports was 112,398,900 tons, last Thursday (6th) 113,457,600 tons, and last Monday (3rd) 113,976,200 tons. Due to the epidemic, the operation time of some ports in Northeast and North China has been lengthened, resulting in a decrease in port unloading volume and a decrease in inventory. The port congestion caused by the previous typhoon in the riverside area has not yet been relieved. In southern China, the arrival of the port is reduced, and the steel mills are still increasing.

2. In terms of spot, the PB powder in Rizhao Port is ¥898 per ton, and the golden bubba powder in Rizhao Port is equivalent to ¥942 per ton.

Trading Strategy

1. Unilateral Strategy: In the near future, the overall increase in the port inventory has not changed much. The dredging port and pig iron production are at a high level, and the demand continues to remain high. Under the high pig iron output, it is expected that the overall inventory will hardly be under cumulative pressure, and the coarse powder is still falling. In the process of downsizing, the PB Jinbubar spread is also at a high level, and the structural problems have not been alleviated. From the current point of view, the 09 contract also has a certain margin. It is expected that the room for weakening of the market is limited. It is recommended to long contracts of future months with long positions.

2. Arbitrage: Use large discounts on iron ore contracts as long positions.

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


Overhaul continues to honor

Prospects of balance sheet: Weekly TA overhaul concentration has rebounded; however, the monthly frequency is still weak. If Yisheng overhaul is not fulfilled, it will continue to accumulate in August; Yisheng overhaul will be flat in August, 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 RU01 rose by 20 or 0.16% and closed at 12,435. The main force contract of JRU10 fell by 2.7 or 1.52% and closed at 175.0. Yunnan WF closed at 10,900 to 11,000 yuan/ton, Hainan SCRWF closed at 10,950 yuan/ton, the second standard rubber closed at 10,700 yuan/ton, and Thailand’s RSS3 closed at 13,350 to 13,400 yuan/ton.

NR: The main force contract of NR10 fell by 55 or 0.58% and closed at 9,455. The main force contract of TF12 fell by 0.2 or 0.15% and closed at 135.0. The quoted price for Qingdao rubber in USD went down by 5-10 dollar/ton with normal inquiries. The spot price or CIF of STR20 was $1,380 per ton. The CIF of SMR20 in December was $1,400 per ton. The CIF of mixed rubber from Thailand in December was $1,390 per ton.

ANRPC news: After seven consecutive months of decline, the global natural rubber demand will increase by 2.6% in the three months ending October. This trend will be mainly driven by the US economic revitalization plan and Chinese demand. ANRPC said that after the economic recovery "earlier than expected", China has increased its natural rubber consumption forecast for 2020 from 4.93 million tons a month ago to 5.04 million tons. However, as people increasingly tend to use nitrile rubber gloves to deal with the epidemic, Malaysia has lowered its demand forecast from 603,000 tons a month ago to 522,000 tons.

In terms of synthetic rubber, external quotations support the cost of butadiene, and low-priced supplies are limited. However, in anticipation of the upcoming release of new device capacity, the downstream is cautious in receiving goods. TOCOM official website has not updated inventory data yet. The inventory in the Qingdao Free Trade Zone was destocked, with a scale of 135,000 tons, which reduced the inventory by about 11.8% from the previous month, and the inventory outside the zone remained at about 687,000 tons.

Futures Operation Advice: The main RU01 contract is developing the consolidating pattern at high positions. It is advised to wait and see, and pay attention to the support at the previous high of 12,240 points. (For reference only).

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