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Daily Market Review on Specified Futures Products 2020.09.16

Fang submitted 2020-09-16 10:16:30

Crude oil

Recently, the three major institutions have issued September reports. The three major institutions have all lowered their demand growth expectations for this year. The epidemic’s drag on the demand side is still lingering. The three major institutions have slightly revised their supply growth this year. Overall, the global oil market is still in a fragile balance, the second outbreak of the epidemic or the restart of Libya's supply may cause the current tight balance between supply and demand to be broken, and whether OPEC, as the current market balancer, can make timely policy adjustment remains to be seen.

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 2,338 lots and closed at ¥824 per ton, the position on I2105 contract increased by 5,037 lots and closed at ¥761 per ton.

Important Information

1. According to Mysteel's data, this week (September 14 to September 20) Australia and Brazil have some iron ore shipping berths undergoing maintenance. It is estimated that the total impact of Australian berth maintenance this week is about 1.53 million tons. In addition, berth 5 of Geraldton Port may be affected by sea waves on the 15th. It is estimated that the amount of berth maintenance in Brazil this week will affect about 988,000 tons.

2. China Iron and Steel Association: In early September, key statistical iron and steel enterprises produced a total of 21,365,000 tons of crude steel, 18,966,000 tons of pig iron, 19,993,300 tons of steel, and 3,192,800 tons of coke. The average daily output of crude steel was 2,136,600 tons, a decrease of 1.09% month-on-month and an increase of 6.73% year-on-year; the average daily output of pig iron was 1,896,200 tons, a decrease of 1.55% month-on-month and an increase of 4.82% year-on-year; the average daily output of steel was 1,999,300 tons, a decrease of 8.86% from the previous month. A year-on-year increase of 6.50%.

4. In terms of spot, the PB powder in Rizhao Port was ¥938 per ton, golden bubba powder price was equivalent to ¥1,002 per ton.

Trading Strategy

1. Arbitrage: This week, 15 port inventory increased by 780,000 tons, MNPJ has accumulated inventory, PB powder inventory increased by 680,000 tons. At present, the overall delivery of Australia and Brazil is relatively high. Recently, iron ore in ports has begun to accumulate significantly. Sintered coarse powder, especially Australian ore, has begun to accumulate slightly. Structural contradictions have improved. The time for the steel with a high inventory is tight. There is a reduction expectation of pig iron production in the off-season. The iron ore inventory is under accumulation pressure in the off-season, and the basis of the 01 contract is also relatively large. For unilateral strategy on 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.


Polyester production and sales dropped once again

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, it is advised to focus on the reverse cash and carry strategy opportunity after the next round of TA overhauls fullfilling and rebound of 1-5 spread. 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 0.32% and closed at 12,400. The main force contract of JRU02 rose by 4.1 or 2.29% and closed at 183.2. 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 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 10 or 0.11% and closed at 9,355. The main force contract of TF12 rose by 1.6 or 1.17% closed at 138.0. The quoted price for Qingdao rubber in USD retreated. The CIF of STR20 in December was $1,440 to $1,450 per ton. The CIF of SMR20 was $1,390 to $1,395 per ton. The CIF of mixed rubber from Thailand in December was $1,405 to $1,410 per ton.

TireWorld News: Recently, the US tire import data report for the first half of the year was released. From January to June, due to the impact of the new coronavirus epidemic, the import volume of passenger car tires and commercial vehicle tires in the United States both showed a double-digit decline. The decline in imports of passenger car tires and truck and bus tires in the United States was 23.7% and 14.7%, respectively.

Today coincides with Malaysia Day in Malaysia, and the local market is closed. The domestic latex in Yunnan area reportedly closed at 10,300 to 10,700 yuan/ton, a premium of about 500 to 600 yuan/ton to cup lump. The premium was the highest level this year, almost the same as last year's high. Export orders for tire production lines are well, and individual brands are even expected to catch up with the same period last year.

Futures Operation Advice: For the main RU01 contract, it is advised to hold a slight long position and set a stop at 12,270. (For reference only).

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