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Daily Market Review on Specified Futures Products 2020.09.17

Fang submitted 2020-09-17 09:53:55

Crude oil

Oil prices rose sharply yesterday, but from the data released by the EIA yesterday, it is not very bullish. On the one hand, the decline in crude oil inventories is much lower than that of API. On the other hand, even when the refinery operating rate drops to 75%, distillate oil

inventory still has a large increase, and the contradiction of structural surplus is still very obvious. The influence of Hurricane Sally was not too bullish. Although the withdrawal of offshore platforms affected about 500,000 barrels/day of crude oil production, due to the preventive shutdown of two refineries in Louisiana, the processing volume fell by about 500,000 barrels/day. The impact on the market is relatively limited. We believe that the potential speculation points for the bulls may lie in two aspects. One is the stance of Victor and Lianhua on the market at the recent APPEC meeting, and the second is to speculate on the OPEC meeting expectations in advance, and betting on Saudi Arabia may provide bottom oli policy to support. But in our view, it is unlikely that Saudi Arabia will cut production alone when other member states have difficulties in meeting the production cuts.

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 9,087 lots and closed at ¥786 per ton, the position on I2105 contract increased by 5,980 lots and closed at ¥728 per ton.

Important Information

1. According to foreign media reports, the Karnataka state government has decided to resume iron ore mining at the Donimalai mine and is expected to receive 6.47 billion rupees (88 million US dollars) from the mine every year. It is reported that the mine was closed in 2018, and the state government will hold a groundbreaking ceremony on September 18 this year and gradually resume operations.

2. National Development and Reform Commission: In August, a total of 6 fixed asset investment projects were approved, with a total investment of 88.2 billion yuan, mainly in the fields of transportation and information technology. In the future, we will continue to support the western region to increase infrastructure investment and livelihood security to make up for shortcomings.

3. In terms of spot, the PB powder in Rizhao Port was ¥911 per ton, golden bubba powder price was equivalent to ¥982 per ton.

Trading Strategy

1. Arbitrage: According to MySteel data this week, the decline in building materials inventory is still not obvious, and the recovery of the demand table is still poor. 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. 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-870.


PX rebounded following naphtha, and PTA processing profits fell 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 fell by 5 or 0.04% and closed at 12,470. The main force contract of JRU02 rose by 3.8 or 2.06% and closed at 188.4. Yunnan WF closed at 10,600 to 10,700 yuan per ton, Hainan SCRWF closed at 11,750 to 11,800 yuan per ton, the secondary standard rubber closed at 10,600 to 10,700 per ton, and Thailand’s RSS3 closed at 15,600 to 15,850 yuan per ton.

NR: The main force contract of NR11 fell by 65 or 0.69% and closed at 9,400. The main force contract of TF12 rose by 1.8 or 1.30% closed at 139.8. The quoted price for Qingdao rubber in USD rose by $5 to $10 per ton with normal inquiries. The CIF of STR20 in December was $1,440 to $1,450 per ton. The CIF of SMR20 was $1,395 to $1,400 per ton. The CIF of mixed rubber from Thailand in December was $1,425 to $1,430 per ton.

Data from the China Association of Automobile Manufacturers: In August, the production and sales of automobiles completed 2.119 million and 2.186 million units respectively, a year-on-year increase of 6.3% and 11.6%. From January to August, the production and sales of automobiles were 14.432 million and 14.551 million units, a year-on-year decrease of 9.6% and 9.7%, respectively. The decline was narrowed by 2.2% and 3.0% compared with the previous seven months, and continued to show a narrowing trend.

The recent rainfall in Thailand has been average. Heavy rains have been observed in Rayong, Surat Thani and Nakhon Si Thammarat Provinces. The production-weighted rainfall across the country has slightly decreased and reported to 11.06mm. According to third-party statistics, inventory outside the Qingdao Free Trade Zone has stopped increasing. Driven by the "Golden September and Silver October", the domestic replacement tire market performed well.

Futures Operation Advice: For the long position on the main RU01 contract, it is advised to stop profit and focus on the pressure at the previous high level at 12,560. (For reference only).

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