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Daily Market Review on Specified Futures Products 2020.08.21

Fang submitted 2020-08-21 10:33:03

Crude oil

After OPEC recently convened a ministerial meeting, Iraq and Nigeria need to submit compensation and production reduction plans before August 28. Iraq has made it clear that it will further reduce production by 400,000 barrels per day, but Nigeria has not made a clear statement about the future cheating member states. It is still doubtful whether a compensatory production reduction can be achieved. On the one hand, the definition of condensate production is still in a vague area, and on the other hand, the market demand for OPEC crude oil is also steadily increasing. Judging from the shipping schedule data released by Kpler in the first half of August, OPEC's export volume has increased by about 800,000 barrels per day compared to July. Some countries have obviously exceeded production, and the issue of compliance rate is being challenged. In addition, the recent situation in Libya is also worthy of attention. Although Haftar has temporarily opened five oil ports, the Libyan National Oil Company NOC has not lifted export force majeure, and oil field production has not responded. In the short term, Libya’s ports have recovered. As long as it is to alleviate the power shortage in its eastern region, its export volume is not expected to increase significantly in the near future.

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. The dollar continues to depreciate sharply

Iron Ore

The position on I2009 contract decreased by 12,486 lots and closed at ¥917.5 per ton, the position on I2101 contract decreased by 10,656 lots and closed at ¥847 per ton.

Important Information

1. According to foreign media reports, the Federation of Indian Mineral Industries (FIMI) has called on the state government to lift restrictions on iron ore exports from Karnataka. Karnataka imposed a ban on iron ore exports in 2010, and the Supreme Court later upheld the ban.

2. The CPCA issued a document on August 20 that the daily retail sales of major auto manufacturers both increased by 2% and 7% year-on-year on the first and second week, respectively, with a cumulative increase of 7%, showing a strong start trend, and the sales trend in the third week is expected to advance steadily, with a daily average increase of about 6% year-on-year. Sales in the fourth week will increase by nearly 20% year-on-year, but because the working day is one day longer than the same period last year, the average daily sales increase affected by this will be about -1% year-on-year. The retail sales trend throughout the month is stable and positive. It is estimated that the retail sales will be 1.69 million vehicles in August.

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: This week, there was a slight decline in port inventory, and the pressure on the port continued to increase. The overall increase in port inventory was not large. The demand side for pig iron and port dredging dropped slightly, and the overall remained at a high level. At present, the overall supply and demand contradiction of iron ore is not obvious, while the inventory of coarse powder is still falling. At present, the overall contradiction of iron ore has weakened, structural problems still exist, and the current profit of steel mills is low. In the later period, it is mainly driven by the recovery of demand for building materials. 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.


Production and sales of polyester was weak, and the terminal operating rate declined

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 45 or 0.36% and closed at 12,315. The main force contract of JRU01 fell by 1.5 or 0.85% and closed at 175.0. Yunnan WF closed at 11,000 to 11,200 yuan per ton, Hainan SCRWF closed at 11,100 yuan per ton, the second standard rubber closed at 10,600 yuan per ton, and Thailand’s RSS3 closed at 13,600 yuan per ton.

NR: The main force contract of NR10 fell by 70 or 0.75% and closed at 9,290. The main force contract of TF12 fell by 0.7 or 0.52% closed at 134.3. The quoted price for Qingdao rubber in USD fluctuated. The spot price or CIF of STR20 in October was $1,390 per ton. The CIF of SMR20 was $1,355 to $ 1,360 per ton. The CIF of mixed rubber from Thailand in December was $1,385 to $1,360 per ton.

TireWorld News: On August 19, local time, US President Donald Trump posted a tweet on social networking sites. In his tweet, he called on his followers to boycott Goodyear tire products. "Don't buy Goodyear tires-they forbid MAGA hats in." The tweet wrote. The "MAGA" mentioned in it was the propaganda slogan during Trump's presidential campaign: "Make American Great Again".

There is a lot of rain in the domestic Yunnan area, and the supply of basic raw materials is tight. The latex is reported to be 9,900 to 10,300 yuan per ton, and the premium is 100 to 300 yuan per ton in terms of the cup lump. According to Zhuo Chuang's statistics, the domestic all-steel operating rate was 74.3%, the week-on-month (relative) production was reduced by 0.1%; the semi-steel operating rate was 69.9%, and the week-on-month (relative) production was reduced by 1.1%. The increase in operating rate was hindered.

Futures Operation Advice: For the main RU01 contract, it is advised to wait and see, and pay attention to the support at the recent low level. (For reference only).

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