FangQuant › Daily Morning

Daily Market Review on Specified Futures Products 2020.08.18

submitted 2020-08-18 10:10:43

Crude oil

The US seizure of four Iranian oil tankers over the weekend became the headline of the market’s attention. However, Iran later claimed that neither the tanker itself nor the cargo on board belongs to Iran. The US claimed that this action was mainly aimed at hitting the oil trade between Iran and Venezuela. In fact, these tankers transport gasoline instead of crude oil. At present, Venezuela realizes crude oil export and refined oil import by swapping crude oil and refined oil with foreign refineries such as India. However, Venezuela’s current output is around 500,000 barrels per day, the impact on the market is very small. Iran has also been subject to US sanctions and its export volume has been sluggish for a long time. Although the US-Iran conflict has signs of intensification, it is unlikely to continue to escalate, and the current impact on oil supply is very small. The current mid-term concern is whether Biden will resume the US-Iran negotiations or the Iranian nuclear agreement if he is elected in the future, so that Iran’s oil production will be released again. Iran is also expected to wait for the results of the US election and will not let the geopolitical escalation go at this time.

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, dollar depreciation.

Iron Ore

The position on I2009 contract decreased by 8,787 lots and closed at ¥908 per ton, the position on I2101 contract increased by 34,257 lots and closed at ¥847.5 per ton.

Important Information

1. According to South Korean customs data, in July, South Korea imported a total of 6.066 million tons of iron ore, a year-on-year decrease of 10.36% and a month-on-month increase of 23.73%. In July, South Korea imported the most iron ore from Australia, which was 4,674,300 tons, down 6.34% year-on-year and up 12.86% month-on-month; followed by South Africa, with imports of 581,300 tons, an increase of 1.9 times and 2.5 times respectively. From January to July, South Korea's iron ore imports totaled 38,805,300 tons, a year-on-year decrease of 8.44%. Among them, the iron ore imported from Australia was 29,459,000 million tons, down 5.11% year-on-year; the iron ore imported from Brazil was 4,473,500 tons, down 13.49% year-on-year; the iron ore imported from South Africa was 2,340,900 tons, down 21.19% year-on-year.

2. Hubei Province issued the "Three-year Action Plan for the "Ten Major Projects" after the Epidemic to Reinvigorate the Shortcomings (2020-2022). According to the "Plan", it will focus on ten areas such as public health system, transportation, water conservancy, energy, new infrastructure, cold chain logistics and emergency reserve facilities, urban and industrial park upgrades, a new round of high-standard farmland construction, and ecological environment. At present, there are 4572 rolling project library projects in the "Ten Major Projects", with an estimated total investment of about 2.3 trillion yuan.

3. In terms of spot, the PB powder in Rizhao Port is ¥925 per ton, and the golden bubba in Rizhao Port is equivalent to ¥942 per ton.

1. Arbitrage: At present, the structural problems of iron ore have not been alleviated, the coarse powder is still falling, the total MNPJ inventory is low, and the price of mainstream fine ore is relatively strong. Market fears still exist, and strong terminal demand is needed. Steel mills' finished product inventory declines to drive a new round of raw material prices upward, and the cost of warehouse receipts after the delivery of the Yangdi brand has increased. It is recommended to wait and see for the time being.

2. Option strategy: The short-term upward drive is not obvious, but the structural problem remains and the downward pressure is limited. It is recommended to sell i2101-P-780.

PTA

Polyester production and sales are still weak, and some TA devices resumes operation

The marginal improvement of weekly TA overhaul concentration rebounded; however, from the monthly frequency,if Yisheng and Hainan overhauls were not realized, the inventory will continue to accumulate in August; if Yisheng and Hainan overhauls were realized, the inventory will be flat in August, while the inventory level was still high. 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, the inventory are still high and 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 focus on PTA factory inspection and fulfillment wishes, and the downstream restocking space and improvement demand.

Natural Rubber

RU: The main force contract of RU01 rose by 1 or 0.08% and closed at 12,485. The main force contract of JRU01 rose by 0.3 or 0.17% and closed at 176.8. Yunnan WF closed at 11,000 to 11,150 yuan per ton, Hainan SCRWF closed at 11,050 yuan per ton, the second standard rubber closed at 10,750 yuan per ton, and Thailand’s RSS3 closed at 13,600 yuan per ton.

NR: The main force contract of NR10 rose by 50 or 0.53% and closed at 9,450. The main force contract of TF12 rose by 1.3 or 0.98% closed at 134.0. The quoted price for Qingdao rubber in USD rebounded by $5 per ton slightly. The spot price or CIF of STR20 was$1,375 to $1,380 per ton. The CIF of SMR20 in August was$1,370 per ton. The CIF of mixed rubber from Thailand in December was \$1,385 per ton.

Tire China News: Tire, as the only part in contact with the ground, is one of the most important parts of a car. But the main component of tires is natural rubber, which may become a temporary transitional medium for bacteria. Linglong Tire has developed and manufactured tires that can inhibit the growth and reproduction of bacteria and viruses. The antibacterial performance of antibacterial tires E. coli and Klebsiella pneumoniae has been tested by professional institutions. The antibacterial performance of tires can reach 99.9%, and the antibacterial effect is obvious.

In terms of synthetic rubber, the supply of butadiene in the north is limited, indicating the support from the supply side, and the transaction price fluctuated upward. The data of Nikko TOCOM (Tokyo Stock Exchange) was transferred to OSE (Osaka Stock Exchange). As of late July, Japan's OSE RSS3 inventory decreased by 14 tons to 8,376 tons, of which 173 tons were into the warehouse and 187 tons were out of the warehouse.

Futures Operation Advice: For the main RU01 contract, it is advised to stop profit, and focus on the support at the previous low level at 12,300. (For reference only).