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Daily Market Review on Specified Futures Products 2020.08.20

Fang submitted 2020-08-20 09:37:34

Crude oil

Recently, OPEC held a ministerial meeting to discuss the implementation of production cuts. At present, the overall framework has not changed much. It is still the overall relaxation of production cuts and compensatory production cuts in the previous overproduction countries. The two countries with more overproduction before are Iraq and Nigeria. At present, Iraq has promised to reduce production by an additional 400,000 barrels per day, while Nigeria wants to classify Agobami crude oil as condensate to avoid the responsibility of reducing production. The output of this part is roughly 100,000 to 150,000 barrels per day. But currently Saudi Arabia does not agree. Earlier, the King of Saudi Arabia spoke with the President of Nigeria to discuss the stability of the oil market. At present, it is clear that Saudi Arabia wants all participants to abide by the rules of the game, rather than cheating in disguise, but in general, OPEC production has already been in June. After bottoming out, in the future, as the summer power generation peak in the Middle East passes, OPEC's overall export volume will gradually increase.

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 4,956 lots and closed at ¥917.5 per ton, the position on I2101 contract increased by 10,961 lots and closed at ¥861 per ton.

Important Information

1. The latest data from the National Bureau of Statistics show that in July 2020, China's steel bar output was 23.922 million tons, an increase of 5.3% year-on-year; the cumulative output from January to July was 14.739 million tons, an increase of 2.9% year-on-year. In July, the output of my China's medium and thick steel belt was 14.689 million tons, an increase of 8.0% year-on-year; the cumulative output from January to July was 94.808 million tons, an increase of 7.4% year-on-year. In July, China's wire rod output was 14.471 million tons, an increase of 7.5% year-on-year; the cumulative output from January to July was 9061.5 tons, an increase of 1.9% year-on-year.

2. IRC's production and sales report for the second quarter of 2020 shows that the output of iron ore (refined powder) in the second quarter was 725,000 tons, an increase of 8.1% month-on-month and a year-on-year increase of 3.8%; the output of iron ore (refined powder) in the second quarter was 720,000 tons, an increase of 8.5% month-on-month and a year-on-year increase of 2%. The company produced 1.4 million tons of iron ore in the first half of the year, an increase of 14.3% year-on-year; sold 1.38 million tons of iron ore in the first half of the year, an increase of 11.6% year-on-year. It is reported that the company mainly produces 65% grade Russian refined powder.

3. In terms of spot, the PB powder in Rizhao Port is ¥950 per ton, and the golden bubba in Rizhao Port is equivalent to ¥983 per ton.

Trading Strategy

1. Arbitrage: The overall inventory of steel prospecting this week is the same as last week, and the output has increased. The current high level of pig iron production supports the overall demand for iron ore. The iron ore structure problem has not been alleviated. The coarse powder is still falling, and the mainstream fine ore Prices are relatively strong, but the profits of steel mills have been severely squeezed by raw materials. In the later stage, a new round of rising raw material prices may be driven by the decline in steel mill finished product inventories. It is recommended to wait and see for the time being.

2. Option strategy: The overall powder ore inventory is still low, and it is recommended to sell i2101-p-800.


Polyester production and sales remain weak, and the peak of TA maintenance has almost passed

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 fell by 30 or 0.24% and closed at 12,380. The main force contract of JRU01 rose by 0.4 or 0.23% and closed at 176.5. Yunnan WF closed at 11,000 to 11,200 yuan per ton, Hainan SCRWF closed at 11,050 yuan per ton, the second standard rubber closed at 10,700 yuan per ton, and Thailand’s RSS3 closed at 13,600 yuan per ton.

NR: The main force contract of NR10 rose by 15 or 0.16% and closed at 9,395. The main force contract of TF12 fell by 0.4 or 0.30% closed at 135.0. The quoted price for Qingdao rubber in USD retreated slightly. The spot price or CIF of STR20 in October was $1,395 to $1,400 per ton. The CIF of SMR20 was $1,365 per ton. The CIF of mixed rubber from Thailand in December was $1,395 to $1,400 per ton.

The Ministry of Industry and Information Technology of Shandong Province: On August 17, the website of the Shandong Provincial Department of Industry and Information Technology publicly solicited opinions on the "Shandong Province Tire Chlor-Alkali Fertilizer Industry Capacity Replacement Implementation Measures". The "Draft for Comments" stipulates that, except for major national and provincial projects and supporting projects that clearly do not require replacement, tire, chlor-alkali, and nitrogen fertilizer construction projects should undergo capacity replacement. The conversion ratio of radial tire casing, chlor-alkali and nitrogen fertilizer production capacity shall be replaced at 1.05:1, and the production capacity of other tires shall be replaced at 1.2:1. The production capacity used for the replacement of the construction project must be stopped before the construction project is put into production, and the production equipment must be dismantled within half a year from the date of the construction project being put into operation.

The supply and demand of concentrated latex are tightly balanced: the main production areas at home and abroad are cutting normally, but the supply is tight to support the quotation; the downstream procurement enthusiasm is bad and the shipment is slow. Inventories outside Qingdao Free Trade Zone are still slightly accumulated on a week-on-week basis. As of late July, Japan's RSS delivery inventory decreased by 154 tons to 8,376 tons, of which 739 tons was into the warehouse and 593 tons was out of the warehouse.

Futures Operation Advice: For the main RU01 contract, it is advised to hold a long position cautiously, and set a s top at the previous low level at 12,300. (For reference only).

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