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Daily Market Review on Specified Futures Products 2020.09.02

Fang submitted 2020-09-02 11:52:15

Crude oil

Although official production data has not yet been released, preliminary data show that OPEC’s production in August increased slightly by 500,000 barrels per day from the previous month. According to Kpler’s shipping schedule export data, OPEC’s exports in August were basically the same as in July. Iraq’s exports fell by about 400,000 barrels per day, and Nigeria’s exports fell by approximately 350,000 barrels per day. The decline in exports of both offsets the growth of exports from Saudi Arabia and the UAE. The current OPEC strategy is to keep an eye on demand and be strict when demand recovery is slow. Controlling output growth can be said to have been very effective at present. Iraq and Nigeria, the countries that cheated before, have begun to reduce production significantly. In addition, the UAE, which has recently increased exports, also said that it will significantly reduce production in October, showing that OPEC is still strict in output control on member states, which actually confirms the reality of the current weak demand and slow recovery.

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 5,363 lots and closed at ¥850 per ton, the position on I2105 contract decreased by 2,006 lots and closed at ¥785 per ton.

Important Information

1. In the "September Air Pollution Prevention and Control Strengthening Management and Control Plan" in Fengrun District, Tangshan City, some steel plants require sintering to stop production, blast furnace production is limited, casting and independent rolling mills will meet emission standards from 0:00 on September 1st to 24:00 on 15th Under the premise of continuous production for 15 days, the rest of the period will stop production.

2. CAAM: In September, the automobile market enters the peak season, and automobile sales are expected to increase more. On September 1, the China Automobile Dealers Association released the latest issue of the "Auto Consumption Index": The auto consumption index in August 2020 was 76.6, an increase from the previous month. The auto market will enter the peak season in September with auto shows, new car launches, policies and other factors, car sales are expected to grow a lot.

3. In terms of spot, the PB powder in Rizhao Port is ¥943 per ton, and the Yandicoogina powder in Rizhao Port is equivalent to ¥999 per ton.

Trading Strategy

1. Arbitrage: This week, inventories of 15 ports fell by 1.12 million tons, Australian ore inventories continued to decline, Brazilian ore accumulated, pellets and refined powder were reduced, coarse powder was slightly accumulated, PB powder, Golden buba, Mike powder, super special powder inventories all have a small accumulation. The demand for iron ore remains high, but the overall supply has rebounded. Brazilian shipments have risen to a high level. The tightness has eased. The contradiction between the structure of coarse powder and pellets has also been eased recently, and the heating season also has a possibility of production restriction, which will affect the demand for iron ore. 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.


Ningbo Yisheng's overhaul is fulfilled, TA supply drops again in stages

1. Under the background of low PX profit, Singapore has an overhaul plan

(1) Under the background of PX's historically low processing fees, Singapore's Mobil with capacity of 800,000 tons will stop for one month in early September.

2. TA is still expected to be overhauled in September

(1) The main port base is still hovering around 01-190; Ningbo Yisheng with capacity of 2.2 million tons finally fulfilled its two-week maintenance plan on September 3, and TA supply dropped in stages.

3. Polyester production and sales fell again

(1) TA and EG led to an increase in raw material costs, filaments continued to lose money, filaments did not continue to reduce prices and chose to increase slightly, polyester production and sales quickly fell from 160% yesterday to 40%.

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 rose by 40 or 0.31% and closed at 12,860. The main force contract of JRU01 rose by 2.2 or 1.13% and closed at 196.7. Yunnan WF closed at 11,700 to 11.850 yuan per ton, Hainan SCRWF closed at 11,750 to 11,900 yuan per ton, the second standard rubber closed at 10,700 to 10,800 yuan per ton, and Thailand’s RSS3 closed at 14,400 to 14,500 yuan per ton.

NR: The main force contract of NR11 rose by 50 or 0.51% and closed at 9,945. The main force contract of TF12 rose by 0.4 or 0.28% closed at 143.0. The quoted price for Qingdao rubber in USD rose by $30 per ton. The CIF of STR20 in December was $1,450 to $1,460 per ton. The CIF of SMR20 was $1,405 to $ 1,420 per ton. The CIF of mixed rubber from Thailand in December was $1,455 to $1,460 per ton.

The Disaster Prevention and Mitigation Department of the Interior Ministry of Thailand: As of August 30, the disaster situation of 15 provinces in Thailand has been alleviated. At present, except for Phitsanulok, the crisis in the other 14 provinces has been lifted. The Disaster Prevention and Mitigation Department has organized investigators, military police, and relevant government agencies to provide initial rescue to the victims as soon as possible, while investigating and assessing the extent of damage, and continuing to provide assistance in accordance with the regulations of the Ministry of Finance.

Today coincides with Vietnam’s Independence Day and the local market is closed. In terms of synthetic rubber, butadiene’s external quotations were firm, which supported the rise in domestic market prices, making it difficult to find low-priced transactions. According to a third-party survey, the stocks outside the domestic bonded zone are about 0.9% higher than the previous month. Downstream tire dealers face increasing prices and tend to wait and see. The tire production line has started stably and the finished product inventory is sufficient.

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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