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Friday, March 31, 2023

Rubber: adjustments under the weekend factor fall back

The Tokyo morning RSS1907 contract opened at 185.3 yen, up 2.8 yen from the previous trading day. The TSR1908 contract opened at 156.7 yen, up 1.6 yen from the previous trading day. The USD/JPY exchange rate was around 110.5 in the morning.

Last weekend’s RSS far-month contract in the Tokyo rubber market was unclear in the Sino-US trade negotiations. The adjustment of the ruler’s length before the weekend was aggravated, falling from the 185 yen. After the main contract of the Shanghai rubber market fell back to 11,500 yuan on Thursday night, it remained in the vicinity of the price level. Although the Chinese-US trade negotiations ministerial meeting just ended, both China and the United States indicated that the negotiations have achieved good progress. However, there is no specific narrative of the results. Instead, there is news that China and the United States will hold talks again in Washington next week, making the suspense of Sino-US trade frictions to be left next week. However, due to the US President Trump’s announcement of a state of emergency in the weekend to resolve the construction budget of the Mexican border wall, once the Democratic Party officially seeks legal channels to prosecute President Trump’s violation of the Constitution, can the US have any spare capacity before the March 1 deadline? An agreement is reached with China, and the negotiating meeting in Washington next week will become crucial.

In terms of spot, the February FOB price of No. 3 cigarettes on February 15 was around 50.71 baht, down 0.35 baht from the previous trading day. The price of the 20-month standard FOB for the February issue was around 44.13 baht, down 0.24 baht from the previous trading day. The USS spot price was around 44 baht, unchanged from the previous trading day.

Technically, the RSS far-month contract continues to oscillate sideways in the 180-185 yen range. In the near future, both in the external market and on the fundamentals, rubber lacks a clear sense of direction. Especially after the recent contract decline, the price structure of the Tokyo Rubber RSS contract has shifted from the moon to the premium. On the weekend, the number of quality inspection applications for the second phase of the Tokyo Commodity Exchange in February was about 1,000 tons. In addition to the 2,000 tons of spot storage in the first phase of this month, the Tokyo market basically solved the same problem as the January contract and the January contract. The possibility of an empty order being forced into a position. In operation, it is recommended to maintain the trading strategy in the short-term, and it is not advisable to chase the high.

The spread between the 1907 month contract and the Shanghai 1905 month contract (Tokyo-Shanghai) at the close of Tokyo on February 15 was US$22/ton.

Weekly review

Last week, the Tokyo rubber market revolved around the Sino-US trade negotiation process and fell back in the market due to the strength of risk asset preferences. From the highest and lowest prices of the week, it basically maintained a range of 180-185 yen. The weekend ended with a close of 182 yen in the middle line. The overall price trend of the TSR market is slightly stronger than the RSS market, but compared with the spot price of Thailand, the Tokyo futures price is still relatively weak, attracting some of the more powerful forces to enter the market.

Let’s take a closer look at the main factors that influenced the price changes in the Tokyo rubber market last week. After the January contract was vacated, the market always worried that the same situation would occur in the February contract, although the number of positions in the near-month contract after entering February was only 600, almost half of the same period in January. However, price changes and changes in positions can be seen that market participants are mostly cautious when dealing with near-month contracts, and also limit the price changes of distant-month contracts. The Tokyo market was closed on Monday, and the Shanghai market reopened after the Spring Festival. The rise in the Shanghai market on Monday night clearly shows signs of bullish intentions, although there are optimistic expectations for Sino-US trade negotiations on the macro economy, and the disqualification of the Thai emperor from the prime minister’s election has become a short-term positive rubber market. material. After the opening of the Tokyo market on Tuesday, the far-month contract rose to a weekly high of 185 yen. However, as the Sino-US trade negotiations ministerial meeting did not release any positive market news, the weak European and American economic indicators intensified. The market is pessimistic about the retreat of the world economy, and rubber prices finally fell back on the weekend’s safe-haven market.

On the macroeconomic front, until the end of February, the process of Sino-US trade negotiations will continue to influence the overall risk bias of the financial market. The Tokyo rubber market will be more affected by the fluctuation of the US dollar against the Japanese yen. At the same time, the price of crude oil in the external market is more affected by the US sanctions against Venezuela and OPEC, and its short-term strong trend will gradually reduce the marginal effect of the commodity market. Another potential threat this week is that President Trump announced a state of emergency on the weekend to take part in the military budget to serve as the US-Mexico border wall. In the short term, President Trump will face the legal proceedings of the Democratic Party, but the partial closure of the government that lasted for more than a month has finally been resolved. The legal proceedings in the United States are originally a marathon confrontation, and its impact on the market may be It is a long-term process.

In the spot market, the spot price will not fall sharply due to the near-production period of the rubber-producing countries in Southeast Asia. Recently, the price of USS raw materials in Thailand has remained at 41-43 baht. Once the market avoids the risk, the price of the month will fall. It may be a good time to layout the near-distance monthly spread.

Finally, let’s take a look at the changes in positions in the Tokyo rubber futures market.

Last week’s change in positions, the middle of the May and June contracts reduced significantly, while the July contract Masukura slow, indicating that the market participants in the mid-term positions, the newly opened hospitals are not strong. Especially after the near-distance monthly price difference returns to the premium, the market may become less liquid in the short term due to lack of kinetic energy. On the other hand, the TSR market price is generally lower than the external market. In particular, there are more positions in the April and May contracts. Around these positions, there may be some opportunities for arbitrage between markets, and we will continue to pay attention.

Translated by Google Translator from http://www.cria.org.cn/newsdetail/47691.html

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