Crude oil

The August reports of the three major organizations diverged. Among them, EIA was relatively optimistic, its estimated demand was revised upward and demand was revised downward, and Call on OPEC in the second half of the year was revised upward compared with last month. However, IEA and OPEC were relatively pessimistic, their estimated demand was revised downward and demand was revised upward, Call on OPEC in the second half of the year was revised downwards. We believe this reflects to some extent the uncertainty of future market demand growth in the second half of the year and the divergence of forecasts on non-OPEC supply elasticity.

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

PTA

The terminal operating rate has declined once again, and the weekly production and sales of polyester remains weak

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 55 or 0.44% and closed at 12,325. The main force contract of JRU01 fell by 1.7 or 0.97% and closed at 173.3. Yunnan WF closed at 11,100 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 13,500 to 13,600 yuan per ton.

NR: The main force contract of NR10 fell by 40 or 0.43% and closed at 9,315. The main force contract of TF12 rose by 0.2 or 0.15% closed at 134.5. 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 $1,390 per ton.

QinRex news: The Thai Cabinet approved the second phase of the 2019-2020 rubber price guarantee program last Tuesday, with a total expenditure of 2.4 billion baht. The rubber price guarantee program is expected to start sometime from now to November, and the guaranteed price of film is up to 60 baht per kilogram. The State-owned Bank of Agriculture and Agricultural Cooperatives (BAAC) will handle the price guarantee scheme. In October last year, the Thai government approved the first phase of the rubber price guarantee program, with a budget of 24.3 billion baht, benefiting 1.7 million rubber farmers and covering 17 million rai rubber plantations.

The recent rainful in Thailand was average. The average daily rainfall in August was 5.05mm, which was lower than the historical average of 7.71mm. The cumulative rainfall in three months increased by less than 50% year-on-year. As of last Friday, the SHFE RU inventory sub-total closed at 248,000 tons, and the inventory futures was 226,000 tons. The difference between the two was 22,000 tons, and the week-on-week (relative) growth rate was 95.4%. There is an increase in warehouse receipts, and the speed of accumulate inventory increases.

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).