The U.S. Treasury Secretary’s remarks that “it will be difficult to reach a stimulus plan agreement before the election” dragged down the market. The three major U.S. stock indexes all closed down. The Dow fell 0.58% to 28514.00 points; the Nasdaq fell 0.80% to 11768.73 points; the S&P 500 The index fell 0.66% to 3488.67 points.
There is news that Saudi Arabia and Russia have reiterated their commitment to the production reduction agreement, plus U.S. crude oil inventories last week It decreased by 5.421 million barrels to 495.4 million barrels. The decline in inventories was greater than expected. International oil prices rose. As of early morning closing today, WTI crude oil rose by 2.32%, Brent crude oil rose by 2.26%, London copper rose by 0.43%, gold rose by 0.58%, and US beans rose by 1.20 %, U.S. soybean meal rose 2.50%, U.S. soybean oil rose 0.89%, U.S. sugar rose 1.93%, and U.S. cotton rose 0.12%.
On Wednesday, domestic commodity futures closed with mixed gains. Styrene rose by more than 5%, Zheng cotton, EG, cotton yarn, etc. rose by more than 2%, rubber, starch, etc. rose by more than 1%, Zheng Chun, Apple, etc. rose slightly; Shanghai silver fell by more than 3%, iron ore, and Shanghai lead fell by More than 2%, Shanghai gold, glass, etc. fell more than 1%, eggs, soybean meal, etc. fell slightly.
The energy and chemical sector rebounded strongly, and styrene rose by more than 5%
After the National Day holiday, chemical futures in the domestic futures market rebounded strongly. Chemical products take turns to “perform”, from staple fibers to LPG, to styrene and polyolefins, and chemical products have received continued attention from the market’s incremental funds. Among them, short fiber stocks recorded two daily limits after being listed on Monday. As of Wednesday’s close, the increase was more than 13%. Styrene increased by 9.26% on a weekly basis and closed at 6,171 yuan/ton on Wednesday. The LPG2011 contract closed up 5% this week, closing at 3,737 yuan/ton. The post-holiday high was more than 400 yuan/ton higher than the pre-National Day low. Polyolefin PP and LL increased after the holiday to around 300 yuan/ton. Methanol, ethylene glycol, and PTA also showed new highlights in just four trading days after the holiday.
“From a macro perspective, better-than-expected macro-financial data is an important factor in the recent rapid recovery in chemical prices.” Zhang Xiao, an analyst at Guoyuan Futures Research Consulting Department, told Futures Daily reporter, the main reason for the rise of styrene for three consecutive days is the rising price of ethylene at the cost end. According to statistics, ethylene prices have experienced an upward trend since the beginning of September, with an increase of nearly 14%, which is the main driving force supporting its rising prices.
“The supply side is relatively tight. Due to the delay in the arrival of some styrene during the National Day holiday, coupled with the reduction in US dollar supply, the import volume is low, which is the main reason for the recent rise in prices.” Zhang Xiao believes that terminal consumption of home appliances and automobile production and sales has picked up significantly. The operating rate of equipment in the three major downstream markets is stable and improving, especially the operating rate of PS has increased significantly. According to statistics, PS operating rate increased by 6.17% month-on-month to 86% during the holidays; ABS maintained a high operating rate at 99.25%, and EPS operating rate remained at 76.1%. With high operating rates, the market is more confident in the later period.
“Port inventories are being depleted at an accelerated pace, and the futures market is performing strongly. As time goes by, we need to pay attention to the matching of deliverable storage capacity and the ratio of virtual and real stocks. In addition, the support on the demand side is There is still inertia in the fourth quarter, so styrene is still in a bullish trend as a whole.” said Zhong Meiyan, director of energy and chemical industry of Everbright Futures.
Zhong Meiyan believes that from the perspective of the polyester industry chain, the main driving factor is the improvement in demand. The recent surge in export orders has brought hope to the polyester sector; judging from the news , textile orders produced in India, including orders from Europe and other regions, have been transferred to China for production. This has resulted in many domestic apparel manufacturing orders being scheduled until May next year. With the expansion of domestic textile production capacity and the improvement of large-scale production, China has effectively guaranteed the supply of the international market and supported the smooth operation of the international industrial chain and supply chain. In addition, concerns about a second outbreak of overseas epidemics are a direct factor leading to the relocation of regional production. The continuous increase in staple fiber listings has driven the purchase of raw materials ethylene glycol and PTA, which has also led to an increase in raw material costs. “The current improvement in demand is still being realized. From the perspective of polyester, there is still room for continued repair.”
Rubber and urea are easy to rise but difficult to fall
After the double holiday, rubber performed strongly, and the main RU2101 contract of Hujiao strongly broke through the 13,000 yuan/ton mark. Ye Haiwen of Guomao Futures analyzed that there has not been a significant reversal in the fundamentals of rubber at present, but signs of marginal improvement and bullish catalysts still exist in the fourth quarter. The substantial reduction in full-milk warehouse receipts is the main speculation logic, and the current La Nina phenomenon is becoming more and more significant. , there is a high probability that abnormal weather in the production areas will become a catalyst for the market in the fourth quarter. Therefore, the center of gravity of rubber prices may continue to move upward in the future, maintaining the target point of RU2101 at 14,000-15,000 yuan/ton in the fourth quarter.
It is worth mentioning that since September, urea spot prices have generally maintained a weak oscillation trend, and futures have fallen into oscillations, fluctuating within the range of 1,600-1,670 yuan/ton most of the time. Lou Zailiang, an energy and chemical analyst at Luzheng Futures, told reporters that at present, factory inventory pressure is not great and output remains low. Although agricultural demand is gradually weakening, there are still many positive factors that will support urea futures in the futureEasy to rise but hard to fall.
“From the perspective of urea supply and demand, urea production has declined month-on-month, and there is no pressure on factory inventories. However, the market is currently most worried about demand.” Lou Zailiang believes that the current autumn fertilizer is close to At the end of the day, autumn wheat sowing will end in mid-October in the north, and will also end in the south at the end of October and early November. The subsequent rebound in agricultural demand will have to wait until winter storage starts, but it will still take a long time. The start-up of compound fertilizer plants is also gradually declining, with the lowest start-up in September falling by about 4% from the beginning of the month. However, the above-mentioned decline in agricultural demand is mainly based on seasonal characteristics and does not exceed market expectations. At the same time, there are still many bullish factors in the current market.
“The current drop in spot demand and even the drop in spot prices are mostly due to seasonal factors and have not exceeded expectations. However, there are expectations for factories to limit production and winter storage demand for spot goods in January. Supported by rising coal prices, the supply reduction caused by the reduction or even suspension of urea production, the recent tight supply of coal and the increase in expectations of a cold winter have further strengthened the above-mentioned positive factors, which will support the difficulty of the main urea 2101 contract falling deeply. At the same time, , if the printing mark further increases the current demand, industrial demand continues to improve, and rises more than expected when the market generally expects the spot price to fall, then the upside space for futures prices will be opened.” Lou Zailiang said.
In terms of PTA, Liu Chang of Industrial Securities Futures believes that the intensity of maintenance determines the intensity of destocking. “The performance of PTA’s cost side and demand side is relatively warm, providing certain support, but PTA prices are still suppressed by high inventory. Whether PTA can be destocked in October still depends on the previously rumored Yisheng (Hainan), Hengli, and Hong Kong Whether the maintenance of equipment in Hong Kong can be implemented. If it can be implemented, PTA is expected to destock around 100,000-150,000 tons in October, and the price may rebound in stages. On the contrary, PTA will enter a storage accumulation cycle, and the price will continue to oscillate weakly. .”
Chinese demand is rising, crude oil support is strong
This week 3. The U.S. Energy Information Administration (EIA) estimated in its latest drilling production report that U.S. shale oil production in November is expected to be 7.692 million barrels per day, a drop of 123,000 barrels per day. Previously, EIA predicted that U.S. shale oil production would be 7.692 million barrels per day. Production fell by 68,000 barrels per day in October to 7.64 million barrels per day. If the EIA forecast is correct, this will be the second consecutive month of decline in U.S. crude oil production since May.
EIA pointed out that due to the passage of hurricanes last week, the U.S. Gulf of Mexico crude oil shutdown hit the highest level in 15 years. Crude oil production in the seven major U.S. shale oil producing areas is expected to decline in November. down 121,000 barrels.
The IEA monthly report estimates that global oil demand will fall by 8.4 million barrels per day in 2020. Global crude oil supply will rise to 92 million barrels per day in the fourth quarter.
The IEA said that the implementation rate of OPEC+ production cuts in September was 103% (98% in August). Production fell by 410,000 barrels per day. OECD crude oil inventories fell by 22.1 million barrels in August.
From the perspective of the impact of the depreciation of the US dollar on crude oil prices, Chen Dong, an energy analyst at Baocheng Futures, believes that the US dollar, as the pricing currency for international crude oil prices, has a far-reaching impact on crude oil prices. higher than other currencies. Generally speaking, the depreciation of the US dollar will lead to an increase in crude oil prices. Because the depreciation of the US dollar will reduce the purchasing power of crude oil producing or exporting countries. Oil-producing countries sell crude oil for dollars and use other currencies to buy goods and services from other countries around the world. For OPEC members, the situation is even more serious. From this perspective, oil-producing countries have a need to increase crude oil prices to make up for the loss of purchasing power. At present, the most effective measure for oil-producing countries to increase prices is to strengthen production cuts. It is reported that Saudi Arabia is considering canceling OPEC’s production increase plan early next year. With the resurgence of a new round of global epidemic, the demand side of the oil market cannot absorb the 2 million barrels per day of crude oil produced again. Saudi Arabia’s firm attitude towards production cuts and threats to short sellers reflect the oil-producing countries’ demands for crude oil price increases.
It is worth noting that the RMB has continued to appreciate recently. In this regard, Chen Dong believes that China is currently replacing the United States as the country with the largest demand for crude oil in the world, and the future demand prospects will continue to rise. As domestic epidemic prevention and control has achieved positive results, it has become a major concentration area attracting global capital, and the momentum for RMB appreciation is strong. Since China is the world’s largest crude oil importer, its dependence on foreign crude oil continues to rise, basically maintaining around 70%. The appreciation of the RMB will directly reduce China’s crude oil import costs, and will enhance foreign crude oil suppliers’ expectations for China’s increased purchasing power, which will in turn The international crude oil market is favorable. In addition, although the fourth quarter is the off-season for domestic demand for refined oil products, approximately 80 million tons to 100 million tons of new refining capacity will be put into production this year and next. These refineries will rely on imported crude oil to meet the supply of raw materials. Therefore, in the context of RMB appreciation, it means that our country can spend less money in exchange for more crude oil reserves, which is conducive to ensuring the stable supply, economic supply and sustainable supply of our country’s oil.
“Therefore, expectations of future US dollar depreciation and RMB appreciation still exist, which is conducive to maintaining a strong crude oil price.” Chen Dong believes that there is the possibility of a new stimulus plan before the US election The low stability has limited the increase in oil prices, with WTI crude oil prices hovering around $40. With the resurgence of the epidemic, OPEC has lowered its oil demand forecast for the next year, which is negative for oil prices in the medium and long term. Investors need to pay attention to the OPEC+ Ministerial Supervision Committee meeting on October 19. If it decides to postpone the production increase plan early next year, oil prices are expected to be supported and rebound further.
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