[Audio version] Jinshi Futures Breakfast on July 19, 2024 (Friday)

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Macro News

1. According to Xinhua News Agency, the Third Plenary Session of the 20th Central Committee of the Communist Party of China was held in Beijing from July 15 to 18, 2024. The plenary session proposed that scientific macroeconomic regulation and effective government governance are the inherent requirements for giving full play to the advantages of the socialist market economic system. It is necessary to improve the macroeconomic regulation system, coordinate and promote reforms in key areas such as finance and taxation, and enhance the consistency of macroeconomic policy orientation. It is necessary to improve the national strategic planning system and policy coordination mechanism, deepen the reform of the fiscal and taxation system, deepen the reform of the financial system, and improve the mechanism for implementing the regional coordinated development strategy. By 2035, a high-level socialist market economic system will be fully established, and by 2029, the 80th anniversary of the founding of the People's Republic of China, the reform tasks proposed in this decision will be completed.

2. The ECB kept interest rates unchanged as expected and did not give guidance on the next move. It also said that domestic price pressures remain high and inflation will be above target for a long time next year. The bank also emphasized that the Governing Council will continue to follow a data-dependent and meeting-by-meeting approach to determine the appropriate restrictive interest rate level and duration.

3. US media revealed that Democratic leaders such as Schumer, Pelosi and Obama all hope that Biden will evaluate whether to continue to run for election. Some senior officials believe that Biden may decide to withdraw from the election as early as this weekend. US media said that Biden instructed to evaluate Harris's poll situation. She has accepted the possibility of losing and withdrawing from the election, but has not yet made a decision. Biden's campaign team and White House officials have stated that Biden will continue to run for election.

Global futures market changes

1. Domestic commodity futures closed at night, energy and chemical products rose and fell, pulp rose 1.52%. Black series rose and fell, coking coal rose 1.66%. Agricultural products generally rose, rapeseed oil rose 1.41%. Most base metals closed down, Shanghai tin fell 2.65%, Shanghai copper fell 2.17%, Shanghai zinc fell 0.91%, Shanghai aluminum fell 0.66%, Shanghai lead fell 0.3%. Shanghai gold fell 0.41%, Shanghai silver fell 1.71%.

2. International oil prices fell across the board, with the September contract of U.S. crude oil falling 0.75% to $80.83 per barrel, and the September contract of Brent crude oil falling 0.31% to $84.82 per barrel.

3. International precious metal futures generally closed lower, with COMEX gold futures down 0.49% to $2,447.9 per ounce and COMEX silver futures down 1.18% to $30.02 per ounce.

4. All base metals closed lower in London, with LME copper futures down 2.74% to $9,371/ton, LME zinc futures down 1.35% to $2,809/ton, LME nickel futures down 0.19% to $16,425/ton, LME aluminum futures down 0.69% to $2,385.5/ton, LME tin futures down 4.17% to $31,575/ton and LME lead futures down 1.62% to $2,155/ton.

5. The main contracts of agricultural futures on the Chicago Board of Trade (CBOT) closed with mixed gains and losses, with soybean futures up 0.26% at 1043.75 cents per bushel; corn futures fell 1.58% to 405.25 cents per bushel, and wheat futures fell 0.83% to 534.75 cents per bushel.

Black hot news

1. According to Mysteel, as of the week of July 18, rebar production and factory inventory decreased for the third consecutive week, social inventory decreased for the second consecutive week, and the apparent demand turned from increase to decrease. Among them, the rebar production was 2.2347 million tons, a decrease of 37,500 tons from the previous week, a decrease of 1.65%; the rebar social inventory was 5.7857 million tons, a decrease of 59,600 tons from the previous week, a decrease of 1.02%; the apparent demand for rebar was 2.3144 million tons, a decrease of 38,300 tons from the previous week, a decrease of 1.63%.

2. According to Mysteel's monitoring of inventories in 33 major cities on the 18th, the social inventory of hot-rolled coils this week was 3.3068 million tons, a decrease of 8,600 tons from the previous week, an increase of 39,100 tons from the previous month, and an increase of 493,800 tons year-on-year (Gregorian calendar). Monitoring inventory data in 55 major cities, the social inventory of hot-rolled coils this week was 4.6184 million tons, an increase of 28,300 tons from the previous week, an increase of 185,700 tons from the previous month, and an increase of 667,200 tons year-on-year (Gregorian calendar).

3. ANZ Bank lowered its three-month target price for iron ore to US$100 per ton (previously US$115 per ton).

4. According to Longzhong Information, the average daily production and sales rate of float glass in China this week dropped by 7 percentage points compared with the previous period, and the industry's inventory accumulation has increased. As of July 18, the total inventory of sample float glass enterprises nationwide was 65.136 million TEUs, an increase of 6 consecutive weeks, approaching a 3.5-month high, an increase of 1.553 million TEUs or 2.44% month-on-month, and an increase of 37.1% year-on-year, with an inventory days of 27.8 days, an increase of 0.7 days from the previous period.

5. This week, Mysteel Coal and Coke Division investigated the profitability of 30 independent coking plants across the country. The national average profit per ton of coke was 33 yuan/ton; the average profit per ton of coke in Shanxi was 39 yuan/ton, the average profit per ton of coke in Shandong was 97 yuan/ton, the average profit per ton of coke in Inner Mongolia was -8 yuan/ton, and the average profit per ton of coke in Hebei was 90 yuan/ton.

Hot news on agricultural products

1. Although the total inventory of the three major oils in China has decreased slightly compared with last year, it is still at a historically high level, and the supply of vegetable oil is sufficient. In the later period, the operating rate of oil mills in July will be at a medium to high level. It is expected that the monthly crushing volume of soybeans and rapeseed will be around 8 million tons and 500,000 tons respectively. Soybean oil is likely to continue to accumulate, and rapeseed oil inventory will remain high. In terms of palm oil, the import profit has turned negative recently, and some companies have washed their ships. The subsequent palm oil imports to the port will maintain a stable and increasing trend. It is estimated that the imports of palm oil to the port in July-September will be 350,000 tons, 320,000 tons and 360,000 tons respectively.

2. According to the Malaysian Palm Oil Board (MPOB), Malaysia maintained the export tax on crude palm oil at 8% in August, but raised the reference price in August to 3,880.86 ringgit/ton from 3,839.63 ringgit/ton in July.

3. Monitoring by the National Grain and Oil Information Center shows that in the first two weeks of July, Chinese companies booked nearly 75 ships of Brazilian soybeans (about 4.5 million tons). These soybeans will be mainly delivered in August, and a small amount will be delivered next year. The accelerated purchase is mainly due to the reduction in Brazilian soybean export quotations.

4. According to the Ministry of Commerce, on June 17, 2024, the Ministry of Commerce decided to initiate an anti-dumping investigation on imports of relevant pork and pork by-products originating from the European Union. In view of the large number of relevant exporters and domestic producers, a comprehensive investigation will impose an excessive burden on the investigation authority and hinder the timely completion of the investigation. In accordance with the relevant provisions of the Anti-dumping Regulations of the People's Republic of China and the Interim Rules on Sampling for Anti-dumping Investigations, the investigation authority decided to conduct the investigation using a sampling method.

5. According to data released by the Brazilian shipping agency Williams, as of the week of July 17, the number of ships waiting to load sugar at Brazilian ports was 87, compared with 89 the week before. The amount of sugar waiting to be loaded at the ports was 4.2544 million tons, compared with 3.9224 million tons the week before. Of the total amount of sugar waiting to be exported that week, the amount of high-grade raw sugar (VHP) was 4.1808 million tons. The amount of sugar waiting to be exported at the Port of Santos was 3.1525 million tons, and the amount of sugar waiting to be exported at the Port of Paranagua was 933,500 tons.

6. The U.S. Department of Agriculture (USDA) released data showing that private exporters reported exports of 510,000 tons of soybeans and 150,000 tons of soybean meal to unknown destinations, both for delivery in 2024/2025.

7. The latest USDA drought report shows that as of the week of July 16, about 5% of the soybean planting area in the United States was affected by drought, compared with 8% in the previous week and 50% in the same period last year. About 5% of the corn planting area in the United States was affected by drought, compared with 7% in the previous week and 55% in the same period last year. About 16% of the cotton planting area in the United States was affected by drought, compared with 18% in the previous week and 17% in the same period last year.

8. According to the U.S. Department of Agriculture, U.S. net soybean export sales in 2023/2024 were 360,000 tons, compared with 208,000 tons in the previous week; U.S. net soybean sales in 2024/2025 were 375,000 tons, compared with 191,000 tons in the previous week; U.S. net corn export sales in 2023/2024 were 438,000 tons, compared with 538,000 tons in the previous week.

9. Data released by the Buenos Aires Grain Exchange showed that as of July 17, Argentina's corn harvest rate was 79.2%, an increase of 9% from the previous week and 13.1% from the same period last year. The forecast for Argentina's corn production remains unchanged at 46.5 million tons.

10. According to the latest data from the U.S. Commodity Futures Trading Commission (CFTC), as of July 12, there were 55,379 unpriced sell orders for U.S. cotton on-call, a decrease of 1,655 lots from the previous month; and 80,938 unpriced buy orders, a decrease of 598 lots from the previous month. On the ICE cotton futures market, there were 53,157 unpriced sell orders for the 2024/25 (August to July of the following year) on-call contracts, a decrease of 1,912 lots from the previous month.

Energy and Chemical Industry Hot News

1. According to the Petroleum Association of Japan (PAJ), Japan's commercial crude oil inventories fell by 130,000 kiloliters to 10.56 million kiloliters in the week ending July 13. Japan's gasoline inventories fell by 55,000 kiloliters to 1.62 million kiloliters. Japan's naphtha inventories fell by 1,000 kiloliters to 1.34 million kiloliters. Japan's kerosene inventories fell by 49,000 kiloliters to 1.66 million kiloliters. The average operating rate of Japan's refineries was 59.3%, compared with 56.4% in the week ending July 6.

2. According to Longzhong Information, as of July 18, 2024, the sample inventory of China's mainstream pulp ports was 1.768 million tons, an increase of 128,000 tons from the previous period, a month-on-month increase of 7.8%. The inventory showed an accumulation trend this week, and the port inventory has been accumulating for the past two consecutive weeks.

3. According to Enterprise Singapore (ESG), Singapore's fuel oil inventories rose by 2.325 million barrels to a four-week high of 20.132 million barrels in the week ended July 17. Singapore's light distillate inventories rose by 1.206 million barrels to a two-week high of 14.513 million barrels. Singapore's middle distillate inventories rose by 2.691 million barrels to an 11-week high of 11.145 million barrels.

4. OPEC+ representatives expect that the group's meeting on August 1 will be a routine meeting and will not change the plan to increase production from the fourth quarter. OPEC+ agreed last month to cancel voluntary production cuts of 2.2 million barrels per day starting in October. Delegates at the meeting said there are no plans for the Joint Ministerial Monitoring Committee to make any recommendations on output policy.

5. According to Wind data, as of July 18, the methanol inventory in East China ports was 583,000 tons, and on July 11 it was 502,500 tons, an increase of 80,500 tons from the previous month.

6. The EIA natural gas report shows that as of the week of July 12, total U.S. natural gas inventories were 320.9 billion cubic feet, an increase of 10 billion cubic feet from the previous week and 250 billion cubic feet from the same period last year, a year-on-year increase of 8.4%. At the same time, it was 46.5 billion cubic feet higher than the five-year average, an increase of 16.9%.

Metal Hot News

1. Copper miner Freeport Indonesia said in a statement that its newly commissioned smelter will process about 400,000 tons of copper concentrate between August and December this year. The smelter has a processing capacity of 1.7 million tons of copper concentrate, an electrolytic copper capacity of about 650,000 tons, and a gold capacity of 50-60 tons. The processing capacity will be gradually increased in August and will reach full capacity in December. At full capacity, Freeport Indonesia's smelter and PT Smelting will be able to process all 3 million tons of copper concentrate produced by Freeport Indonesia in the country.

2. Market sources said that the aluminum premium paid by Japanese buyers from July to September was settled at $172 per ton, up 16%-19% from the previous quarter, reflecting tighter supply in Asia. This level is higher than the $145 to $148 per ton from April to June, and it is also the second consecutive quarter of increase. But it is lower than the initial offer of $175 to $190 per ton by global producers.

3. Bank of America predicts that the average price of copper will be $10,750 per ton in 2025 and $12,000 per ton in 2026. Tight copper mines are increasingly affecting refined production, and the relative scarcity of copper projects is beginning to be reflected in metal prices.

Bragging about "futures" - revealing the logic of commodity trading!

1. The black series has obvious off-season characteristics, and the short-term trend of coking coal is not optimistic?

Everbright Futures analysis pointed out that from the perspective of market conditions, on the one hand, the overall performance of the black sector in the recent period is in line with the characteristics of the off-season, and coking coal is also difficult to be immune; on the other hand, the rebound in the customs clearance of Mongolian coal and the expectation of higher supply have led to marginal upward supply pressure, and the trend of coking coal is under pressure. In addition, the mandatory conversion of the old and new national standards has led to greater selling pressure on old national standard steel and weaker production capacity of steel companies, which has negatively fed back to the raw material side, driving the decline of coking coal. On the whole, with imports running at a high level, supply recovering marginally and terminal demand performing poorly, the short-term trend of coking coal may not rebound significantly, and it is mainly based on maintaining the previous weak trend. However, the current profits of coking enterprises are still acceptable, the enthusiasm of coking enterprises to start production is high, and some independent coking plants maintain rigid demand purchases. We should not be overly optimistic about the downward space of coking coal, and pay attention to changes in market sentiment and policies.

2. As the situation in Palestine and Israel eases, will the container shipping to Europe start to decline?

Huatai Futures analysis pointed out that in terms of fundamentals, the spot freight rates of some airlines were lowered at the end of July, and the transaction price of large containers of major airlines remained at the price level of US$8,500. In the future, the freight rates of liner companies in early August were the same as those in July. Coupled with the sufficient supply of shipping capacity in August, the market expects that the spot market is gradually peaking, and there is a possibility of a slight correction in freight rates. Therefore, the market is dominated by volatile trends. In terms of geopolitics, the conflict between Israel and Hamas continues. Although there is news of a ceasefire, the near-month contract is still resilient due to the support of spot prices, and the disturbance is not as great as that of the far month. At present, the market fluctuates greatly, and investors are advised to do a good job of risk management.

Today's important futures data and events at a glance

1. July 19th is to be determined. Iron ore stocks in 45 ports in China as of July 18th. Profits from purchased piglets and self-reared pig farming in China as of July 19th. Weekly stocks of rapeseed meal and soybean meal in China as of July 19th.

2. At 22:40 on July 19, FOMC permanent voting member and New York Fed President Williams delivered a speech on monetary policy.

The article is forwarded from: Jinshi Data