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Daily Market Review on Specified Futures Products 2020.09.15

Fang submitted 2020-09-15 10:10:32

Crude oil

After Hurricane Laura, Hurricane Sallie will once again have an impact on oil production and refinery operations in the Gulf of Mexico. Previously, due to the power outage caused by Hurricane Laura, Citogo and Philip 66 near Lake Charles are still closed. In response to Sally, two refineries in eastern Louisiana began to shut down preventively, with a combined production capacity of approximately 500,000 barrels per day. From the intensity and trajectory of the hurricane, Sally is expected to have less impact than Laura, but it still has an impact on the United States. The operating rate of refineries in the Gulf region has been dragged down. As the refineries enter the autumn inspection stage, it is not ruled out that some refineries will enter the autumn inspection ahead of schedule. The off-season characteristics of crude oil demand will be more obvious.

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 decreased by 3,906 lots and closed at ¥845 per ton, the position on I2105 contract increased by 588 lots and closed at ¥776 per ton.

Important Information

1. Mysteel’s statistical sample company’s port iron ore trade inventory totaled 1450.5, a decrease of 26.9 or 1.8% month-on-month; among them, the Australian mine was 751.6, an increase of 33.5; the Brazilian mine was 335.8, a decrease of 64.2; the remaining 363.2, an increase of 3.7.

2. According to data from the National Energy Administration, from January to August, the total electricity consumption of the whole society was 4,767.6 billion kWh, a year-on-year increase of 0.5%, which achieved positive growth for the first time this year, indicating that the economy continues to develop towards a positive trend.

3. In the first eight months of this year, the banking industry added 14.4 trillion yuan in RMB loans, an increase of 2.4 trillion yuan year-on-year. The loans were mainly invested in key areas such as manufacturing, infrastructure, technological innovation, small and micro businesses, and rural areas.

4. In terms of spot, the PB powder in Rizhao Port was ¥941 per ton, BRBF price was equivalent to ¥998 per ton.

Trading Strategy

1. Arbitrage: This week, Australia's shipments increased by 1.853 million tons week-on-week, and Brazil increased by 739,000 tons. The shipments rebounded after a decline last week. The overall shipments of Australia and Brazil were relatively high. Recently, port iron ore inventory has begun to accumulate significantly, iunventory of sintered coarse powder, especially Australian ore, has begun to accumulate slightly, and structural contradictions have improved. The steel spot transaction turned for the better after shrinking, but the time for the high inventory to destock was tight. For 01 iron ore, it is recommended to wait and see. As to arbitrage strategy, the 1-5 reverse cash and carry arbitrage strategy is recommended.

2. Option strategy: It is advised to hold the short position on i2101-C-950.

PTA

Polyester production and sales improved, indicating that factories start replenishment before the festival.

In September, it was the first time to realize destocking if all overhauls are fulfilled, but the absolute number of inventories will still be high after the destocking; in October, if the overhauls are slow, there will be an expectation of inventory accumulation, and if all the overhauls are fulfilled, the inventory will decrease in stage. 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 80 or 0.65% and closed at 12,415. The main force contract of JRU02 rose by 2.4 or 1.36% and closed at 179.1. Yunnan WF closed at 11,500 to 11,600 yuan per ton, Hainan SCRWF closed at 11,700 to 11,750 yuan per ton, the secondary standard rubber closed at 10,600 to 10,650 per ton, and Thailand’s RSS3 closed at 15,300 to 15,850 yuan per ton.

NR: The main force contract of NR11 rose by 35 or 0.38% and closed at 9,350. The main force contract of TF12 rose by 2.4 or 1.79% closed at 136.4. The quoted price for Qingdao rubber in USD fluctuated. The CIF of STR20 in December was $1,445 to $1,450 per ton. The CIF of SMR20 was $1,380 to $1,390 per ton. The CIF of mixed rubber from Thailand in December was $1,410 to $1,415 per ton.

Citing a news from Yunnan: On September 14, Ruili City, Yunnan Province held a press conference on the prevention and control of the new coronavirus pneumonia epidemic. It was mentioned at the meeting that in response to the current situation of the spread of the epidemic abroad, Ruili City has strengthened meetings and consultations with the Mujie region of Myanmar, and further strengthened the investigation and classified management of Burmese personnel in the city. The following measures have been specifically taken: First, for Burmese personnel who has fixed work locations, after complete registration information and nucleic acid testing, they are isolated on the spot and are not allowed to go out, and the grid strengthens supervision; second, Burmese personnel who entered the country before the port was closed but their documents have expired, strictly register their information, and are included in the qualification management network according to their place of residence or work site. The third is to take centralized repatriation measures for those who cannot verify the time of entry, have no fixed residence, or fixed place for work.

The domestic latex in Hainan is reported to be 11,000 to 11,300 yuan per ton, and there is almost no difference between the quotations of SCRWF and concentrated latex. As of late August, Japan's RS3 inventory continued to decrease by 143 tons to 7,291 tons, of which 394 tons were into the warehouse and 537 tons wereout of the warehouse. The pressure on domestic epidemic prevention in Yunnan has increased, and the circulation of people and materials in and out of the country has become more difficult, and the local supply of raw materials may be tight.

Futures Operation Advice: For the main RU01 contract, it is advised to hold a slight long position and set a stop at 12,240. (For reference only)

Daily Market Review on Specified Futures Products

Crude oil

After Hurricane Laura, Hurricane Sallie will once again have an impact on oil production and refinery operations in the Gulf of Mexico. Previously, due to the power outage caused by Hurricane Laura, Citogo and Philip 66 near Lake Charles are still closed. In response to Sally, two refineries in eastern Louisiana began to shut down preventively, with a combined production capacity of approximately 500,000 barrels per day. From the intensity and trajectory of the hurricane, Sally is expected to have less impact than Laura, but it still has an impact on the United States. The operating rate of refineries in the Gulf region has been dragged down. As the refineries enter the autumn inspection stage, it is not ruled out that some refineries will enter the autumn inspection ahead of schedule. The off-season characteristics of crude oil demand will be more obvious.

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 decreased by 3,906 lots and closed at ¥845 per ton, the position on I2105 contract increased by 588 lots and closed at ¥776 per ton.

Important Information

1. Mysteel’s statistical sample company’s port iron ore trade inventory totaled 1450.5, a decrease of 26.9 or 1.8% month-on-month; among them, the Australian mine was 751.6, an increase of 33.5; the Brazilian mine was 335.8, a decrease of 64.2; the remaining 363.2, an increase of 3.7.

2. According to data from the National Energy Administration, from January to August, the total electricity consumption of the whole society was 4,767.6 billion kWh, a year-on-year increase of 0.5%, which achieved positive growth for the first time this year, indicating that the economy continues to develop towards a positive trend.

3. In the first eight months of this year, the banking industry added 14.4 trillion yuan in RMB loans, an increase of 2.4 trillion yuan year-on-year. The loans were mainly invested in key areas such as manufacturing, infrastructure, technological innovation, small and micro businesses, and rural areas.

4. In terms of spot, the PB powder in Rizhao Port was ¥941 per ton, BRBF price was equivalent to ¥998 per ton.

Trading Strategy

1. Arbitrage: This week, Australia's shipments increased by 1.853 million tons week-on-week, and Brazil increased by 739,000 tons. The shipments rebounded after a decline last week. The overall shipments of Australia and Brazil were relatively high. Recently, port iron ore inventory has begun to accumulate significantly, iunventory of sintered coarse powder, especially Australian ore, has begun to accumulate slightly, and structural contradictions have improved. The steel spot transaction turned for the better after shrinking, but the time for the high inventory to destock was tight. For 01 iron ore, it is recommended to wait and see. As to arbitrage strategy, the 1-5 reverse cash and carry arbitrage strategy is recommended.

2. Option strategy: It is advised to hold the short position on i2101-C-950.

PTA

Polyester production and sales improved, indicating that factories start replenishment before the festival.

In September, it was the first time to realize destocking if all overhauls are fulfilled, but the absolute number of inventories will still be high after the destocking; in October, if the overhauls are slow, there will be an expectation of inventory accumulation, and if all the overhauls are fulfilled, the inventory will decrease in stage. 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 80 or 0.65% and closed at 12,415. The main force contract of JRU02 rose by 2.4 or 1.36% and closed at 179.1. Yunnan WF closed at 11,500 to 11,600 yuan per ton, Hainan SCRWF closed at 11,700 to 11,750 yuan per ton, the secondary standard rubber closed at 10,600 to 10,650 per ton, and Thailand’s RSS3 closed at 15,300 to 15,850 yuan per ton.

NR: The main force contract of NR11 rose by 35 or 0.38% and closed at 9,350. The main force contract of TF12 rose by 2.4 or 1.79% closed at 136.4. The quoted price for Qingdao rubber in USD fluctuated. The CIF of STR20 in December was $1,445 to $1,450 per ton. The CIF of SMR20 was $1,380 to $1,390 per ton. The CIF of mixed rubber from Thailand in December was $1,410 to $1,415 per ton.

Citing a news from Yunnan: On September 14, Ruili City, Yunnan Province held a press conference on the prevention and control of the new coronavirus pneumonia epidemic. It was mentioned at the meeting that in response to the current situation of the spread of the epidemic abroad, Ruili City has strengthened meetings and consultations with the Mujie region of Myanmar, and further strengthened the investigation and classified management of Burmese personnel in the city. The following measures have been specifically taken: First, for Burmese personnel who has fixed work locations, after complete registration information and nucleic acid testing, they are isolated on the spot and are not allowed to go out, and the grid strengthens supervision; second, Burmese personnel who entered the country before the port was closed but their documents have expired, strictly register their information, and are included in the qualification management network according to their place of residence or work site. The third is to take centralized repatriation measures for those who cannot verify the time of entry, have no fixed residence, or fixed place for work.

The domestic latex in Hainan is reported to be 11,000 to 11,300 yuan per ton, and there is almost no difference between the quotations of SCRWF and concentrated latex. As of late August, Japan's RS3 inventory continued to decrease by 143 tons to 7,291 tons, of which 394 tons were into the warehouse and 537 tons wereout of the warehouse. The pressure on domestic epidemic prevention in Yunnan has increased, and the circulation of people and materials in and out of the country has become more difficult, and the local supply of raw materials may be tight.

Futures Operation Advice: For the main RU01 contract, it is advised to hold a slight long position and set a stop at 12,240. (For reference only)

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