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Daily Market Review on Specified Futures Products 2020.09.30

Fang submitted 2020-09-30 10:11:12

Crude oil

Recently, Brent’s EFS against Dubai has continued to fall, and it has now fallen to the low level in May this year. This reflects the current weakness in the spot market in the West. In the absence of buying recovery from China, India and other countries, it is superimposed on Libya’s resumption of production last week. The surplus of light crude oil in the Atlantic Basin has increased, and the sale of West African crude oil is still very difficult. At the same time, US crude oil continues to be exported to Europe and the price is more favorable, which has a crowding-out effect on West African crude oil. The yield of distillate oil is higher, and the light distillate yield of American WTI crude oil is higher (the current gasoline split is better than distillate oil), which also determines that the current refinery gives priority to processing American oil instead of West African oil.

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 18,198 lots and closed at ¥790.5 per ton, the position on I2105 contract increased by 402 lots and closed at ¥731.5 per ton.

Important Information

1. The total shipment of new caliber Australia and Brazil iron ore was 27.077 million tons, an increase of 3.051 million tons from the previous month; the total shipment from Australia was 18.885 million tons, an increase of 1.301 million tons from the previous month; of which 15.955 million tons were shipped from Australia to China, an increase of 1.569 million from the previous month Tons; Brazil’s total shipments were 8.192 million tons, an increase of 1.75 million tons from the previous month.

2. The Shandong Cement Industry Association issued a notice, requiring companies that have not implemented the staggered peak production to strictly implement the supplementary shutdown plan before November 14, 2020, to ensure that the shutdown period is 160 days. At the same time, before November 14, 2020, due to the unified organization and implementation of emergency emission reduction measures by the municipal people’s governments and related departments, if the total production time of peak shift exceeds 160 days, it will be considered in the production peak shift in 2020 to 2021 by the Shandong Provincial Cement Industry Association.

3. In terms of spot, the PB powder in Rizhao Port was ¥880 per ton, golden bubba powder price was equivalent to ¥953 per ton.

Trading Strategy

1. Arbitrage: This week, shipments from Brazil returned to a high level, and shipments from Australia also increased. The overall shipments were at a relatively high level. With the secondary epidemic in Europe, the diversion of iron ore is expected to weaken, and the overall supply pressure is expected to remain high. The demand side of pig iron has fallen from a high level recently. Under destocking time constraints, there is pressure on pig iron output at the end of the year. Iron ore is expected to accumulate in the overall inventory, but the basis of the 01 contract is already large. It is recommended to lighten up the short position. The iron ore 1-5 reverse cash and carry arbitrage strategy is advised to lighten up and wait and see.

2. Option strategy: It is advised to short i2101-C-870.


The upstream Hainan Refining and Chemical PX gradually restarted, and the downstream polyester production and sales fell

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 all the overhauls are fulfilled, the inventory will continue to decrease, and it is advised to focus on the overhauls development. There is an expectation of rigid accumulationIn in November and December. 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 95 or 0.75% and closed at 12,530. The main force contract of JRU02 was flat with the previous trading day and closed at 187.2. Yunnan WF closed at 11,800 to 12,100 yuan per ton, Hainan SCRWF closed at 12,050 and 12,200 yuan per ton, the secondary standard rubber closed at 10,750 to 10,800 per ton, and Thailand’s RSS3 closed at 15,900 to 16,200 yuan per ton.

NR: The main force contract of NR12 fell by 55 or 0.58% and closed at 9,505. The main force contract of TF12 fell by 1.6 or 1.6% closed at 138.2. The quoted price for Qingdao rubber in USD retreated slightly by $5 to $10 per ton. The spot or CIF of STR20 was $1,480 to $1,490 per ton. The CIF of SIR20 in October was $1,410 to $1,415 per ton. The CIF of mixed rubber from Thailand in January was $1,450 per ton. Sukatas Tangwiriyakul, Deputy Director of Commercial and Operations of the Rubber Authority of Thailand, said that it would pay compensation to farmers whose rubber plantations were damaged by tropical storm Noor. He said that the government has approved a compensation plan for the affected rubber farmers in accordance with the Natural Disaster and Fire Farmer Assistance Regulations. Farmers who are eligible for compensation must have at least 20 rubber trees per vegetable damaged by tropical storms. The maximum compensation limit is 3000 baht per rai.

Rainfall near Thailand was average, and heavy rains were observed in Krabi and Trang provinces. The year-on-year cumulative rainfall growth in 90 days fell below 50.0% to 48.1%. The premium of Thai local latex to cup glue was reported at 12.65 baht/kg, running at a high level. The double festival is approaching, and some domestic tire production lines have plans to suspend production, mostly 3 to 5 days. Export orders are good, and the overall operating rate is higher than the same period last year.

Futures Operation Advice: There is no evening session today. The main RU01 contract is likely to drop again, it is advised to hold a slight position and wait and see. (For reference only).

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