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Daily Market Review on Specified Futures Products 2020.09.01

Fang submitted 2020-09-01 10:11:30

Crude oil

After the hurricane, the market assessed the capacity loss of the relevant refineries. At present, except for the two refineries near Lake Charles (Citigo and Phillip 66) that cannot restart in a short time, other pre-stopped refineries are expected to resume production within this week. The restart has relatively limited impact on the market. At present, the global refined oil inventory is high, refinery profits are hovering at low levels, and the performance of the crude oil spot market is relatively weak. Recently, more and more West African crude oil has entered Saldanha Bay, South Africa for storage. If Saudi Arabia’s OSP is lowered in the future, Asia-Pacific countries may switch to purchasing crude oil from the Middle East. Crude oil in the Atlantic basins of West Africa, the Mediterranean, and the North Sea will not rule out that they will face more pressure.

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 I2101 contract increased by 5,381 lots and closed at ¥846 per ton, the position on I2105 contract decreased by 15 lots and closed at ¥781 per ton.

Important Information

1. According to foreign media reports, some steel plants in the Indian state of Odisha are currently facing a shortage of iron ore raw materials. Odisha’s steel company has called on the government to force all iron ore mines in the state to sell at least half of their ore to Odisha’s local steel industry. Only the remaining ore can be exported to other parts of the country or abroad

2. The steel industry PMI surveyed and released by the China IOT Steel Logistics Professional Committee was 47.0% in August, a decrease of 2.2 percentage points from the previous month. Among them, in August, the new order index was 45.6%, a decrease of 2.1 percentage points from the previous month, and was below 50% for three consecutive months; the new export order index was 34.7%, a decrease of 8.1 percentage points from the previous month; the production index was 49.3%, dropped by 5.2 percentage points last month, and returned to the contraction range after operating above 50% for four consecutive months; the purchase volume index was 42.5%, a decrease of 4.8 percentage points from the previous month; the raw material inventory index was 35.2%, a decrease of 7.0 percentage points from the previous month.

3. In terms of spot, the PB powder in Rizhao Port is ¥940 per ton, and the Yandicoogina powder in Rizhao Port is equivalent to ¥989 per ton.

Trading Strategy

1. Arbitrage: This week, Australia sent 1.316 million tons to the world, and volume that Australia sent to China decreased even more. Brazil shipped 1.362 million tons. Iron ore demand remained high, but the overall supply has rebounded. Brazil may continue to increase in the later period, and overall supply and demand is becoming loose, and low profits of steel mills suppress iron ore, the heating season also has production restriction that may affect iron ore demand. It is recommended to long 01 hot rolled coils and short 01 iron ore.

2. Option strategy: It is recommended to hold the long posiution on put seagull options, that is, sell i2101-C-870 and i2101-P-730, and buy i2101-P-810.


The price of filament is reduced again, and the production and sales of polyester increases

In September, the inventory decreased slightly while full overhauls were realized, and the high inventory could not be resolved; there is still a cumulative stock expected in October. In terms of the unilateral strategy, it is advised to be neutral; for the strategy across varieties, the high inventory problem has not been resolved yet, and it is not advised to maintain the strategy across varieties, 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 1-5 cash and carry arbitrage strategy may rebound with TA overhauls, and after overhauls, the inventory accumulation expectation will return and it is advised to remain the 1-5 reverse cash and carry arbitrage strategy. It is advised to focus on PTA factory inspection and fulfillment wishes, and the downstream restocking space and improvement of demand.

Natural Rubber

RU: The main force contract of RU01 fell by 40 or 0.31% and closed at 12,770. The main force contract of JRU01 rose by 9.8 or 5.28% and closed at 195.3. Yunnan WF closed at 11,600 to 11.700 yuan per ton, Hainan SCRWF closed at 11,650 to 11,800 yuan per ton, the second standard rubber closed at 10,700 to 10,800 yuan per ton, and Thailand’s RSS3 closed at 14,150 to 14,200 yuan per ton.

NR: The main force contract of NR11 fell by 35 or 0.35% and closed at 9,830. The main force contract of TF12 rose by 2.0 or 1.42% closed at 142.6. The quoted price for Qingdao rubber in USD rose by $30 per ton. The CIF of STR20 in November was $1,440 per ton. The CIF of SMR20 was $1,410 to $ 1,420 per ton. The CIF of mixed rubber from Thailand in December was $1,455 to $1,460 per ton.

TireWorld News: On August 31, Sailun Group Co., Ltd. released the 2020 semi-annual report. Faced with the impact of the epidemic, net profit continued to grow substantially. Data show that from January to June, the company achieved operating income of 6.798 billion yuan, a year-on-year decrease of 4.15%; net profit attributable to shareholders of listed companies was 635 million yuan, a year-on-year increase of 25.26%.

In recent days, RSS3 has risen strongly, and the local competition for latex raw materials in Thailand has brought cost support to concentrated latex. With the gradual weakening of overseas weather, the quotation for imported latex concentrates remains firm. As of mid-August, Japan's RSS delivery inventory decreased by 784 tons, and the total inventory fell below 8,000 tons to 7,343 tons, of which 198 tons was in to the warehouse and 982 tons was out of the warehouse.

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

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