[Audio version] Jinshi Futures Breakfast on September 2, 2024 (Monday)

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Macro News
​1. The Shanghai Shipping Exchange released the weekly report on China's export container transport market on August 31. This week, China's export container transport demand was basically stable. The freight rates of different routes showed a divergent trend due to their respective fundamental differences, and the comprehensive index continued to fall. On August 30, the Shanghai Export Container Comprehensive Freight Index released by the Shanghai Shipping Exchange was 2963.38 points, down 4.3% from the previous period.
The National Bureau of Statistics said that in August, the manufacturing purchasing managers' index was 49.1%, down 0.3 percentage points from the previous month; the non-manufacturing business activity index was 50.3%, up 0.1 percentage points from the previous month; the composite PMI output index was 50.1%, down slightly by 0.1 percentage points from the previous month, and my country's overall economic prosperity remained stable. Affected by the recent high temperature and heavy rain, and the off-season of production in some industries, the manufacturing PMI fell to 49.1% in August, and the prosperity level fell. In August, the non-manufacturing business activity index was 50.3%, up 0.1 percentage points from the previous month, and the prosperity rebounded slightly.
The Palestinian Gaza Strip began vaccinating children against polio on August 31. The Israeli government stressed that the specific measure of opening a "safe zone" to facilitate vaccination does not mean a "full ceasefire". The Israeli Prime Minister's Office stressed on the 31st that a "full ceasefire" has not been implemented. Israel has only opened a "humanitarian corridor" and a "safe zone" for vaccination during a specific period of time.
According to CCTV, on September 1, local time, the Palestinian side stated that the Israeli army bombed several areas in the Gaza Strip that day, including the bombing near the Burayji refugee camp that killed four people and injured many others.
The U.S. core PCE price index rose by 0.2% month-on-month in July, the same as last month and in line with market expectations. The U.S. core PCE price index rose by 2.6% year-on-year in July, the same as last month and the market expectation was 2.70%.
Global futures market changes
Domestic commodity futures closed generally down at night trading, with energy and chemical products performing weakly, including fuel oil down 3.63%, PTA down 2.77%, low sulfur fuel oil down 2.48%, crude oil down 2.42%, glass down 2.29%, and soda ash down 2.13%. Black series fell across the board, with coking coal down 1.81%, coke down 1.22%, and iron ore down 1.12%. Agricultural products generally fell, with cotton yarn down 2.48%, palm oil down 1.12%, and rapeseed meal down 1.11%. Most base metals closed down, with Shanghai nickel down 2.43%, stainless steel down 1.44%, Shanghai tin down 0.56%, Shanghai zinc down 0.44%, Shanghai aluminum down 0.30%, Shanghai copper down 0.26%, and Shanghai lead up 0.49%. Shanghai gold fell 0.58%, and Shanghai silver fell 2.01%.
International precious metal futures generally closed lower, with COMEX gold futures down 0.95% to $2,536 per ounce, down 0.4% for the week; COMEX silver futures fell 2.48% to $29.245 per ounce, down 1.93% for the week.
International oil prices fell across the board. The October contract of U.S. crude oil fell 2.98% to $73.65 per barrel, down 1.58% for the week; the November contract of Brent crude oil fell 2.25% to $77.05 per barrel, down 1.41% for the week.
Most of the base metals in London closed higher, with LME copper futures up 0.08% at $9,251.5/ton, down 0.4% for the week; LME zinc futures up 0.75% at $2,899.5/ton, down 0.43% for the week; LME nickel futures down 1.78% at $16,700/ton, down 0.35% for the week; LME aluminum futures down 0.47% at $2,446/ton, down 3.78% for the week; LME tin futures up 0.29% at $32,440/ton, down 1.43% for the week; LME lead futures up 1.57% at $2,067.5/ton, down 2.34% for the week.
The main agricultural futures contracts of the Chicago Board of Trade (CBOT) closed higher collectively, with soybean futures up 0.65% to 999 cents per bushel, up 2.67% for the week; corn futures up 1.39% to 401.5 cents per bushel, up 2.69% for the week; and wheat futures up 0.59% to 552 cents per bushel, up 4.55% for the week.
Black hot news
​1. The central bank released a statistical report on the loan allocation of financial institutions in the second quarter. At the end of the second quarter of 2024, the balance of real estate development loans was 13.77 trillion yuan, a year-on-year increase of 2.8%, 1.3 percentage points higher than the end of last year, and an increase of 610.5 billion yuan in the first half of the year.
According to China Securities Journal, there are market rumors that the relevant parties are considering further lowering the interest rates of existing mortgage loans, allowing the existing mortgage loans of up to RMB 38 trillion to seek mortgage transfers in order to reduce residents' debt burden and boost consumption. According to the relevant plan, existing mortgage customers can renegotiate mortgage interest rates with banks without waiting until January next year (the usual interest rate adjustment time).
The production of silicomanganese in the southern production areas has been severely reduced. The number of furnaces in Guangxi and Guizhou is only in the single digit. Large factories continue to reduce their load, which suppresses the supply of silicomanganese to decline slightly. Mysteel statistics show that the operating rate of 187 independent silicon and manganese enterprises nationwide is 47.09%, a decrease of 1.12% from last week; the average daily output is 26,005 tons, a decrease of 450 tons.
After research, Zhengzhou Commodity Exchange has decided to add Baosteel Resources Holdings (Shanghai) Co., Ltd. and Xiamen International Trade Nonferrous Minerals Co., Ltd. as designated manganese silicon delivery warehouses. The above-mentioned newly added delivery warehouses will carry out delivery business from the date of this announcement.
According to the survey data of the China Real Estate Index System's 100-city price index on the new and second-hand residential sales markets in 100 cities and the rental markets in 50 cities across the country, in August 2024, the average price of second-hand residential properties in 100 cities was 14,549 yuan/square meter, a month-on-month decrease of 0.71%, a decrease of 0.03 percentage points from July, and a month-on-month decline for 28 consecutive months; the year-on-year decline was 6.89%.
According to China Federation of Logistics and Purchasing, the PMI of the steel industry in August 2024 was 40.4%, a decrease of 2.1 percentage points from the previous month, indicating that the steel industry continued to weaken. The changes in the sub-index show that the off-season characteristics of the steel industry are still obvious, the downward trend in market demand has continued, steel production has been reduced, steel mill inventories continue to increase, raw material prices are running at a low level, and steel prices have bottomed out and rebounded. It is expected that in September, driven by the expectation of peak demand, market demand will pick up, steel production will increase slightly, and raw material and steel prices will rise.
China Iron and Steel Association issued a statement on Canada's imposition of additional tariffs and other restrictive measures on steel products imported from China: On August 26, 2024, the Canadian government announced that it would impose an additional tariff of 25% on some steel products originating from China from October 15 this year. As a representative of the Chinese steel industry, China Iron and Steel Association firmly opposes Canada's unilateralism and trade protectionism that disregards facts and WTO rules.
According to Gangyin E-commerce, the total urban inventory this week was 9.8915 million tons, a decrease of 401,600 tons (-3.90%) from last week, including 39 cities and a total of 147 warehouses.
Hot news on agricultural products
According to foreign media reports, the International Sugar Organization (ISO) predicted last Friday in its first assessment of the 2024/2025 season that the global sugar gap will reach 3.58 million tons. In its quarterly report, the intergovernmental organization also lowered its forecast for the 2023/2024 season (October to September) from the estimated supply shortage of 2.95 million tons in June to a shortage of 200,000 tons.
According to the National Grain and Oil Information Center, as the profits of palm oil imports have improved recently, companies have increased their purchases of ships for palm oil imports. Ship schedule monitoring shows that the arrival volume of palm oil in my country is expected to be 300,000 tons, 360,000 tons and 420,000 tons from August to October respectively.
Data released by the Canadian Grain Commission showed that Canada's canola exports fell 40.1% to 166,700 tons in the week ending August 25, compared with 278,100 tons in the previous week. As of August 25, Canada's commercial canola inventory was 1.3751 million tons.
The National Weather Service of the United States released the latest news on August 30, local time, saying that the high temperature and high humidity weather will continue in the middle Mississippi River, Ohio and Tennessee Valley areas that day. The temperature in the Pacific Northwest of the United States and the northern Great Basin will also be much higher than the average level. The high temperature and humidity pose a serious threat, and the heat index can reach 100 to 110 degrees Fahrenheit (about 37.8 to 43.3 degrees Celsius).
A regulatory regulation released by the Indonesian Ministry of Trade shows that Indonesia raised the reference price of crude palm oil (CPO) in September to US$839.53 per ton from US$820.11 per ton in August. Based on the new reference price, the export tax and special tax for crude palm oil in September will be US$52 per ton and US$90 per ton, respectively, higher than the levels in August.
Li Qiang presided over the State Council executive meeting. The meeting pointed out that establishing a big agriculture and big food concept and building a diversified food supply system are important measures to ensure national food security and build an agricultural power. We must consolidate the supply base of grain and important agricultural products, firmly guard the red line of arable land and ecological protection, expand direct and indirect sources of food, and improve the level of food quality and safety.
The U.S. Department of Agriculture (USDA) released data showing that private exporters reported sales of 132,000 tons of soybeans to China and 100,000 tons of soybean meal to Colombia, both for delivery in 2024/2025. The U.S. soybean year began on September 1.
According to data from shipping research agency ITS, Malaysia's palm oil exports from August 1 to 31 were 1,445,442 tons, a decrease of 9.9% from 1,604,578 tons exported in the same period last month.
Energy and Chemical Industry Hot News
Recently, the China Phosphate and Compound Fertilizer Industry Association held a supply and demand situation consultation meeting in Kunming, and issued the following initiatives with participating companies: further strengthen industry self-discipline, give priority to ensuring domestic demand, and make greater contributions to ensuring food security; strengthen production management, control production costs, make every effort to stabilize domestic market prices, and maximize benefits for farmers.
According to the median estimate of the agency's survey of four traders and refiners, Saudi Aramco may reduce the official selling price of Arab Light crude oil sold to Asia by $0.85/barrel in October. Compared with the increase of $0.2/barrel in September, the price difference between the official selling price of Arab Light and the Oman-Dubai benchmark crude oil in October is estimated to be $1.15/barrel.
According to data from the Osaka Exchange (OSE) official website on August 30, as of August 20, 2024, the rubber (RSS) inventory in the exchange's designated warehouses was 4,136 tons, a decrease of 66 tons from 4,202 tons as of August 10.
Six sources said OPEC+ will continue to increase oil production as planned from October as oil supply disruptions in Libya and some members pledged to cut production to make up for overproduction offset weak demand. The eight OPEC+ members plan to increase production by 180,000 barrels per day in October as part of the start of unwinding the recent 2.2 million barrels per day production cuts, while keeping other production cuts until the end of 2025.
According to the U.S. Energy Information Administration (EIA), soybean oil used to produce biofuels in the United States increased to 1.267 billion pounds in June. In May, soybean oil used for biodiesel was 1.076 billion pounds. Soybean oil remains the largest biodiesel feedstock in the United States.
Metal Hot News
​1. According to the Shanghai Futures Exchange, copper stocks decreased by 9,317 tons, aluminum stocks decreased by 1,478 tons, zinc stocks decreased by 872 tons, lead stocks increased by 2,172 tons, nickel stocks increased by 1,291 tons, and tin stocks increased by 302 tons last week.
CCTV reporters learned from relevant departments of Xing County, Luliang City, Shanxi Province that at about 5:00 on August 31, 2024, an aluminum liquid explosion occurred in the aluminum bar production workshop of Shanxi Southeast Precision Technology Co., Ltd. After the accident, relevant departments of Shanxi Province, Luliang City and Xing County immediately rushed to the scene to organize rescue and disposal. The accident caused a total of 3 deaths and 1 serious injury. At present, the on-site rescue has ended, and the cause of the accident is under further investigation and verification.
Meng Xiangfeng, vice president of Contemporary Amperex Technology Co., Ltd., said that the period of rapid decline in lithium battery costs should be over. In the future, if there is no major fluctuation in the cost of raw materials and minerals, there is still room for lithium battery costs to decline through technological advancement, process improvement, and integration of the industrial chain. As costs fall, application scenarios will further expand.
Bragging about "futures" - revealing the logic of commodity trading!
Weak supply and demand expectations will continue to suppress bottle chip prices. How should we view the market outlook?
GF Futures analysis pointed out that under the weak supply and demand expectations, bottle flake futures opened low on the first day of listing. Looking at the future market, weak supply and demand expectations will still suppress bottle flake prices and processing fees, but with the sharp drop in the market, the processing fees for bottle flakes in March and May were compressed to less than 400 yuan/ton, respectively, which are at a relatively low level, or may cause bottle flake manufacturers to reduce or stop production. Therefore, there is no need to be overly bearish on bottle flakes. The absolute price will fluctuate with PTA, and the processing fee in May will be expanded on dips around 350 yuan/ton.
After 7 rounds of price increases and price reductions for coke, where will the price go in the future?
Zhonghui Futures analysis pointed out that after seven rounds of price increases and decreases for coke, all negative factors have been exhausted and the driving force for decline has weakened. The collection of storage housing from the end of the third quarter to the fourth quarter of special bonds and the real estate financing white list are expected to accelerate the destocking of real estate in stages. In addition, the high temperature and rainy season are over, and the seasonal demand in the steel market is expected to arrive. The sentiment in the terminal market has been significantly boosted. Steel mills have resumed production, and the new national standards have accelerated production in the later period, driving the demand for furnace materials. The positive feedback from the industry is expected to resonate with the golden September and silver October peak season. Federal Reserve Chairman Powell confirmed the market's expectation of a rate cut in September. After the Federal Reserve's rate cut, the domestic policy's operational space has further expanded. The spot price of coke is expected to continue to fluctuate and rise in the short term. In the long term, under the overall weak fundamentals, it is not advisable to blindly chase the rise.
A look at this week's important futures data and events
On September 2, affected by the U.S. Labor Day holiday, CBOT agricultural futures, ICE cotton and sugar futures were closed for one day; trading of precious metals and U.S. crude oil futures contracts under the U.S. CME ended ahead of schedule at 02:30 on the 3rd Beijing time; trading of Brent crude oil futures contracts under the U.S. ICE ended ahead of schedule at 01:30 on the 3rd Beijing time.
September 2, to be determined, SPPOMA Malaysia palm oil data from August 1 to 31. Earlier data from the Southern Peninsula Palm Oil Pressers Association (SPPOMA) showed that from August 1 to 25, 2024, Malaysia's palm oil yield decreased by 1.94%, oil extraction rate increased by 0.2%, and output decreased by 0.88%.
At 23:00 on September 3, the global manufacturing purchasing managers' index (PMI) for August was released. Previously, the global manufacturing purchasing managers' index for July was 48.9%, which means that the momentum of global economic recovery continues to weaken and the downward pressure has increased. We will pay attention to whether the manufacturing purchasing managers' index for August can stop the decline. If the index rises, it may mean global economic recovery.
USDA oilseed crushing report at 03:00 on September 4. The previous USDA oilseed crushing report showed that the US soybean crushing volume in June was 5.510461 million tons, lower than the market expectation of 5.538 million tons. The US soybean oil production in June was 2.184 billion pounds, higher than the market expectation of 2.081 billion pounds.
USDA crop growth report at 04:00 on September 4. Last week, the good-to-excellent growth rate of US soybeans was 67%, in line with market expectations, but down 1% from the previous week. Market participants were worried that the recent hot and dry weather in the Midwest of the United States would affect soybean production, but the forecast showed mild weather, which alleviated people's concerns.
At 2:00 am on September 5, the Federal Reserve released the Beige Book. According to the previous Beige Book, more regions in the United States lack economic momentum and consumer purchasing power has declined. Pay attention to whether this Beige Book will continue to show a slowdown in US economic growth.
September 5th (tbd) Saudi Aramco will announce the official crude oil price. On August 5th, Saudi Arabia raised the price of its flagship crude oil exported to Asia for the first time in three months, indicating that Saudi Arabia is still confident in the demand in Asia. Pay attention to whether the crude oil price will continue to increase this month. If it does, it may be good for crude oil.
At 16:00 on September 6, the Food and Agriculture Organization (FAO) released the global food price index for August. Previous data showed that the FAO Food Price Index averaged 120.8 points in July 2024, a slight decrease from the revised index in June and a decrease of 3.1% compared with the same period last year. It is observed whether the index will continue to decline after the release of this index.
At 20:30 on September 6, the seasonally adjusted non-farm payrolls for August in the United States will be released. Earlier, Powell said in his speech at Jackson Hole that "the time has come for policy adjustments." Institutions expect that the August non-farm payrolls will accelerate the falsification of overly pessimistic economic expectations and overly optimistic expectations of interest rate cuts.
At 20:45 on September 6, FOMC permanent voting member and New York Fed President Williams delivered a speech. At 23:00 on the same day, Fed Governor Waller delivered a speech on the economic outlook.
The article is forwarded from: Jinshi Data
[Audio version] Jinshi Futures Breakfast on September 2, 2024 (Monday)

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