Futures Early Peak - Audio Version

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Macro News

1. The inflation rate in the U.S. rose to 2.7% in November, a figure that meets economists' expectations and is higher than October's 2.6%. The data highlights concerns about sticky inflation following the rise in October. It is widely expected that the Federal Reserve will cut interest rates by 25 basis points for the third consecutive time next week, but the pace of rate cuts next year is less certain, as the Fed strives to maintain the inflation rate close to 2% while ensuring a healthy labor market.

2. Following the release of the U.S. CPI report, swap traders have increased their bets on the Federal Reserve cutting rates before the end of 2025. They now expect a cumulative cut of 87 basis points by then, which implies a 25 basis point cut next week; an additional two cuts of about 25 basis points each in 2025, which is fewer than the four cuts proposed by Federal Reserve officials in the latest quarterly dot plot in September.

3. The Central Bank of Brazil raised interest rates by 100 basis points, increasing the Selic rate from 11.25% to 12.25%.

Global Futures Market Anomalies

1. Domestic commodity futures closed mostly higher in the night session, with energy and chemical products generally rising; low-sulfur fuel oil rose 1.78%, No. 20 rubber rose 1.51%, fuel oil rose 1.31%, and crude oil rose 1.28%. Most black series products rose, with coke up 0.77%. Agricultural products were mixed, with soybean oil up 0.88% and soybean meal down 0.6%. Base metals were mixed, with Shanghai tin up 0.99%, alumina up 0.6%, stainless steel up 0.54%, Shanghai nickel up 0.53%, Shanghai aluminum up 0.2%, and Shanghai copper down 0.11%. Shanghai gold rose 0.64%, and Shanghai silver rose 0.04%.

2. London base metals closed mixed, with LME copper down 0.43% at $9177/ton, LME zinc down 0.51% at $3119/ton, LME nickel up 0.83% at $15845/ton, LME aluminum down 0.1% at $2606/ton, LME tin up 0.9% at $30045/ton, and LME lead down 1.57% at $2032/ton.

3. The main contracts for agricultural futures on the Chicago Board of Trade (CBOT) closed mixed, with soybean futures up 0.08% at 995.5 cents/bushel; corn futures down 0.22% at 448 cents/bushel; wheat futures up 0.09% at 562.25 cents/bushel.

4. International oil prices rose across the board, with U.S. oil for January 2025 contracts up 2.61% at $70.38/barrel. Brent oil for February 2025 contracts rose 2.01% to $73.64/barrel.

5. International precious metal futures generally closed higher, with COMEX gold futures up 1.3% at $2753.8/ounce and COMEX silver futures up 0.13% at $32.79/ounce.

Black Series Hotspot News

1. According to Mysteel, the Henan Jiyuan Steel Plant plans to carry out maintenance on one of its 1280m³ blast furnaces starting at the end of December, with a planned maintenance period of one month, expected to impact daily molten iron production by approximately 3600 tons.

2. Mysteel's survey results show that this week, the average iron water ex-factory cost of mainstream sample steel mills in Tangshan was 2364 yuan/ton, and the average cost of steel billets including tax was 3140 yuan/ton, with a week-on-week decrease of 15 yuan/ton. Compared to the current ex-factory price of common steel billets at 3130 yuan/ton on December 11, steel mills faced an average loss of 10 yuan/ton, a reduction of 25 yuan/ton week-on-week.

3. According to data from China Steel Network, as of December 11, 2024, among 201 production enterprises nationwide, 75 steel mills with a total of 119 blast furnaces were under maintenance, with a total volume of 99,670 cubic meters, an increase of 430 cubic meters compared to the previous week. The operating rate of major steel mills' blast furnaces based on volume is 75.69%, down 0.04% from the previous week.

4. According to SMM research, as of December 11, the operating rate of 242 steel mills' blast furnaces was 86.23%, a decrease of 2.71 percentage points. The average daily molten iron production of the sampled steel mills was 2.3626 million tons, a decrease of 47,500 tons compared to the previous period.

Agricultural Products Hotspot News

1. Data from the Southern Peninsula Palm Oil Millers Association (SPPOMA) shows that Malaysia's palm oil yield per hectare decreased by 12.89% from December 1-10, 2024, with oil extraction rates down by 0.57% and total output down by 15.89%.

2. According to Mutian Technology, the total external transportation volume of Yunnan in November was 65,000 tons, a decrease of 34,000 tons compared to the same period last year. With an increase in sugar factories starting to crush in December, sugar production will also increase. Based on the external transportation situation over the past five crushing seasons, the average value is 96,000 tons. Given that there was very little carryover sugar from the last crushing season in Yunnan, the sugar external transportation volume in December is expected to increase to around 100,000 to 110,000 tons.

3. According to the China Cotton Association, as of December 8, 2024, the cumulative processing volume of national lint cotton was 4.948 million tons, a year-on-year increase of 19%. The cumulative processing volume of lint cotton in the Xinjiang region was 4.869 million tons, a year-on-year increase of 19.6%.

Energy and Chemical Hotspot News

1. The latest data from the Fujairah Oil Industrial Zone in the UAE shows that as of the week ending December 11, the total refined oil inventory at the Port of Fujairah in the UAE was 15.798 million barrels, a decrease of 1.689 million barrels from the previous week, nearing the historical low of 14.235 million barrels set on November 25.

2. According to Longzhong Information, as of December 11, 2024, China's methanol port inventory totaled 1.085 million tons, a decrease of 136,300 tons from the previous data. Among them, the East China region saw a reduction of 108,500 tons; the South China region saw a reduction of 27,800 tons. This week, methanol port inventory saw a significant reduction, with only 107,500 tons unloaded by foreign vessels.

3. Data released by the Japan Petroleum Association (PAJ) shows that for the week ending December 7, Japan's commercial crude oil inventory increased by 15,000 kiloliters, reaching 9.58 million kiloliters. The average operating rate of Japanese refineries was 82.7%, compared to 79.4% for the week ending November 30.

4. OPEC's monthly report shows a downward adjustment of the global crude oil demand growth forecast for 2024 from 1.82 million barrels per day to 1.61 million barrels per day; the 2025 global crude oil demand growth forecast has been lowered from 1.54 million barrels per day to 1.45 million barrels per day; this marks the fifth consecutive month of downward adjustments to the global crude oil demand growth forecasts for this year and next.

5. EIA Report: For the week ending December 6, U.S. commercial crude oil imports, excluding strategic reserves, averaged 5.984 million barrels per day, a decrease of 1.306 million barrels per day from the previous week. U.S. EIA gasoline inventories increased the most since the week of January 5, 2024; U.S. EIA strategic petroleum reserve inventories are the highest since the week of November 4, 2022; U.S. commercial crude oil inventories, excluding strategic reserves, are the lowest since the week of October 11, 2024.

Metal Hotspot News

1. Data from the China Association of Automobile Manufacturers shows that in November, automobile production and sales reached 3.437 million and 3.316 million units, respectively, with month-on-month increases of 14.7% and 8.6%, and year-on-year increases of 11.1% and 11.7%. From January to November, automobile production and sales reached 27.903 million and 27.94 million units, respectively, with year-on-year increases of 2.9% and 3.7%. In November, new energy vehicle sales reached 1.512 million units, a year-on-year increase of 47.4%; from January to November, new energy vehicle sales totaled 11.262 million units, a year-on-year increase of 35.6%.

2. According to the China Nonferrous Metals News, on December 10, the 2024 magnesium futures listing cultivation and market seminar was held in Yuncheng City, Shanxi Province. The meeting reached a consensus that industry enterprises should unify their pace and strengthen self-discipline to keep prices within a reasonable range. Therefore, in the short term, market supply should be reduced, and in the long term, a standardized market mechanism needs to be established. The meeting unanimously agreed on three measures: first, magnesium smelting enterprises will jointly reduce production; second, Yulin Magnesium Industry Group will continue to stockpile; third, explore a price guidance mechanism linked to aluminum and other commodities.

3. The market is actively discussing the price differences that emerged after the sell-off of gold and silver in London, but this is not the case on the New York Mercantile Exchange. Currently, foreign traders are hotly debating today's price spread, speculating on two possibilities: the first is insufficient physical supply, and the second is an expanded gold EFP price spread, leading to short sellers being 'squeezed'.

4. According to Mysteel, on December 11, Yichun Mining's wholly-owned subsidiary Yichun Lixun issued a bidding invitation, stating that it would conduct online bidding for 60 tons of battery-grade lithium carbonate produced by Jiangxi Jiuling Lithium Industry from 9:30 to 10:30 on December 17.

Bragging 'Period' Talks - Revealing the Trading Logic of Varieties!

1. The oilseed sector continues to diverge; how long will the decline in palm oil last?

Everbright Futures analysis indicates that on Wednesday, the domestic oilseed sector continued to diverge, with palm oil remaining in decline while rapeseed oil rose over 2%. From the underlying logic, the Malaysian MPOB report shows that due to exports of 1.49 million tons falling short of expectations, Malaysian palm oil stocks in November were 1.83 million tons, down 2.6% month-on-month, with a slower than expected pace of consumption, cooling bullish sentiment. At the same time, considering the proximity of the delivery month restrictions, the exit of the palm oil January contract's main position is pushing prices closer to spot prices, bringing prices back to realistic logic. For rapeseed oil, a 7% year-on-year reduction in Canadian canola production has led to a downward adjustment in the seed year balance sheet inventory, with the rapeseed oil May contract regaining support. In the short term, rapeseed oil may perform better than soybean and palm oil. In the medium term, palm oil producing areas are still in a production reduction cycle, and the significant backwardation for far-month contracts makes a steep price drop unlikely. After the main positions are rolled over, both the low domestic inventory and the upcoming Ramadan purchases in India in March still provide upward momentum for the May contract, which is expected to continue to be strong in the medium term.

2. Why is alumina raw material supply tight yet prices continue to drop?

Hua Wen Futures analysis indicates that on the supply side, bauxite supply remains tight, with prices for imported and domestic bauxite continuing to rise. With decent profits, domestic alumina operating rates remain high, but the potential for increased operating capacity is still constrained by tight ore supplies. However, overseas alumina prices have shown signs of easing, alleviating the situation of import losses. On the demand side, domestic electrolytic aluminum production is expected to increase in December, along with new production capacity coming online. However, due to the suspension of production at a certain electrolytic aluminum plant in Guangxi for technical upgrades, which is expected to affect 100,000 tons/year of capacity, and small-scale suspensions of production for technical upgrades at certain aluminum plants in Sichuan and Chongqing, the increase in domestic electrolytic aluminum operating capacity in December may slow down. Overall, domestic alumina spot prices still appear relatively firm, but there are signs of a turning point in overseas alumina transaction prices, which may ease import losses, benefiting the improvement of domestic spot sources. The fundamental support for alumina prices is weakening, and under the influence of market sentiment, it is expected that short-term alumina futures prices may continue to decline, but attention should be paid to domestic spot trends, as high basis may limit the depth of price declines.

Recent Important Futures Data and Events Overview

1. On December 12 at 20:00, Conab will announce the results of its third grain production survey for Brazil's 2024/25 crop year. Previous data indicated that CONAB expects the soybean production for Brazil in the 2024/25 crop year to reach 166.1434 million tons, an increase of 18.4247 million tons or 12.5% year-on-year, and an increase of 89,500 tons or 0.1% month-on-month. Attention is on whether Brazil's soybean production data will be revised upwards this month.

2. On December 12, pending, Malaysia's October rubber supply and demand report will be released. Previous data showed that in September 2024, Malaysia's natural rubber production decreased by 13.9% month-on-month to 30,929 tons, down from 35,908 tons in August 2024. Malaysia's natural rubber export volume in September was 39,915 tons, a decrease of 30.6% from 57,482 tons in August.

Article forwarded from: Jinshi Data