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Daily Market Review on Specified Futures Products 2020.10.14

Fang submitted 2020-10-14 10:42:42

Crude oil

The imports of China's crude oil rebounded in September

Demand is still the focus of the oil market in the future. We believe that the following core variables need to be paid attention to: 1. The development of the epidemic situation: at present, the number of overseas infected people has increased sharply, especially in European and American countries. However, compared with the second quarter, the current mortality rate is low, so all countries are trying to avoid taking large-scale city closure measures (the reason that support the economy), but with the further development of the epidemic situation in the future, we cannot say there will be no more stringent social alienation measures; 2. The return progress of China's crude oil procurement: the export volume in September increased by 1 million barrels per day to 11.83 million barrels per day, and the number of floating warehouses in the port has dropped rapidly in recent years, but there is still no obvious recovery from the discounted real goods such as ESPO, but it is worth to note that the high-frequency data of the domestic travel consumption during the national day 3. According to the current weather forecast of European and American countries, the temperature of this coming winter is expected to be warmer than that of previous years. However, due to the impact of the epidemic situation, the increase in the number of people who work at home this year may also increase the consumption of household heating. Whether the heating consumption in winter will increase the demand of straw of distillate oil is still a concern.

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 geopolitical events and sustained sharp depreciation of the US dollar

Iron Ore

On October 13th, 2020, the position on I2101 contract decreased by 6,118 and closed at ¥812.5 per ton, the position on I2105 contract increased by 1,875 and closed at ¥749.0 per ton.

Important Information

1. According to Mysteel, this week (October 12 - October 18) there is no routine maintenance plan for Australian berths, and some iron ore shipping berths in Brazil are under maintenance. In Australia, there is no routine maintenance plan for berths. However, berths 5 in Geraldton port may be affected by waves from Oct 12th to Oct 13th. In Brazil, the berth maintenance plan of pier III North in the port of Madeira (PDM) is scheduled for three days from Oct 13th to Oct 15th, with an estimated 204000 tons will be affected. The maintenance plan of pier IV south of the port is scheduled to start on Oct 17th, with an impact of 2 days this week, with an estimated 314000 tons will be affected. Therefore, it is estimated that the impact of berth maintenance in Brazil this week will be 518000 tons

2. According to the media reports, India's Orissa mining development company may resume its Bagiaburu mining business in October. The decision was based on the local Supreme Court which allows OMDC to resume mining at Bagiaburu (iron ore), Belkundi (iron ore and manganese ore) and Bhadrasahi (iron ore and manganese ore). OMDC said it had appealed to the Supreme Court on two issues, one is to allow it to start mining business, and the other is to allow it to sell mine inventory.

3. In terms of spot, the PB powder in Rizhao Port was ¥905 per ton, golden bubba powder price was equivalent to ¥980 per ton,

Trading Strategy

1. The number of global shipments in Australia and Brazil is reduced, the total shipment volume is still at a high level, the arrived volume of iron ore is reduced, the pressure on the port is not changed much, the port dredging is increased, and the supply side pressure is still on. In terms of demand, recently, Tangshan region successively issued production restriction documents in October to suppress the rising volume of hot metal; meanwhile, with the advent of autumn and winter, the blast furnace operating rate is expected to decline, and the iron ore demand is expected to be weak. Overall, iron ore faces the situation of oversupply in the later stage, and there is an accumulation expectation. At present, the price basis of iron is relatively large. After the price basis is narrowed, the short position can be made.

2. Option strategy: It is advised to hold the short position on i2101-C-870. (For reference only)


PTA: The sale of Polyester production is good, a PX device was overhauled temporarily

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 accumulation 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 fulfilling 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: October 13th, 2020, the main force contract of RU01 up by 110 or 0.83% and closed at 13,315. The main force contract of JRU03 rose by 0.8 or 0.40% and closed at 201.0. Yunnan WF closed at 12,450 to 12,600 yuan per ton, Hainan SCRWF closed at 12,600 to 12,700 per ton, the secondary standard rubber closed at 11,100 to 11,200 per ton, and Thailand’s RSS3 closed at 16,400 to 16,500 yuan per ton.

NR: The main force contract of NR12 up by 165 or 1.65% and closed at 10,170. The main force contract of TF12 rose by 0.5 or 0.34% closed at 147.5. Qingdao rubber in USD up by $5 per ton. The spot or CIF of STR20 was $1,540 to $1,550 per ton. The CIF of SIR20 in October was $1,480 to $1,485 per ton. The CIF of mixed rubber from Thailand in January was $1,515 per ton to $1520 per ton

Media news: Top Glove Corp, the world's largest producer of rubber gloves, which has been listed in Kuala Lumpur and Singapore, plans to list in Hong Kong and raise more than $1 billion. According to the report, the company will become the largest Malaysian company to be listed in Hong Kong. Top Glove said the company would be better able to implement its growth strategy if it went public.

Futures Operation Advice:

The purchase price of domestic latex continued to rise sharply: in Hainan, the price of concentrated latex was 14200-14300 yuan, a premium of 2750 yuan/ton in terms of latex for SCRWF, and the latex price in Yunnan was 11100-11200 yuan / ton. The strong demand for concentrated latex supports the high price of raw materials. Downstream tire production lines maintain a high level. The pressure of finished product inventory is still large. Some tire brands issued the letters of increasing price, ranging from 2% to 3%. The main ru01 contract should be wait-and-see and pay attention to the recent high pressure. (For reference only).

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