The Reseach&Trade Practice Of Natural Rubber Futures. -Mr Hu Kaike From Shanghai Taorui

Transcription

1 The Reseach&Trade Practice Of Natural Rubber Futures -Mr Hu Kaike From Shanghai Taorui

2 PART I:Research

3 Research Program Fundamental analysis of the industry Macroeconomic Initial Inventory Out puts Imports National Economy Monetary Policy Ending Inventory Consu mption Exports Industrial Economy Global Economy

4 Research Program Supply&Demand Balance is the key The region research of Thailand&Vietnam(monthly): Learn about the year-on-year change/month to month growth rate of the major producers tapping days and outputs. The survey of monthly consumption and weekly capacity utilization: Tracing the terminal raw material consumption and raw material/finished goods inventory changes. The survey of domestic tire dealer inventories(monthly): Tracing the tire stock,another form of natural rubber inventories. The survey of domestic truck fleet(monthly): Tracing the real consumption by sampling survey the mileage and actual change tire quantity for a heavy truck team. The inventory survey(weekly): Tracing the total inventories of natural rubber in the whole industrial chain. Weather Soil Raw material purchasing Emotion Tire producers raw material purchasing(daily) Better combined with the short-term price changes.

5 The Global Balance Of Supply & Demand Annual output supply demand Business inventories Inventory consumption ratio ,697 9,361 1, ,395 12,245 10,906 1, % ,240 12,579 11,240 1, % ,629 12,968 11,336 1, % ,140 13,771 11,928 1, % ,766 14,610 12,004 2, % Annual output supply demand Business inventories Inventory consumption ratio % 16.5% -27.6% % 2.7% 3.1% 0.0% -0.4% % 3.1% 0.9% 21.9% 2.5% % 6.2% 5.2% 13.0% 1.1% % 6.1% 0.6% 41.3% 6.3%

6 The Balance Of Supply & Demand In China Annual Initial Inventory Output Import supply demand inventory Business inventory Inventory consumption ratio ,010 4,329 3, % ,201 4,488 3, % ,592 5,035 4, % ,142 5,823 4,781 1, % ,335 6,262 4,870 1, % Annual Initial Inventory Output Import supply demand inventory Business inventory Inventory consumption ratio 8.7% 6.3% 3.7% 1.4% 19.4% 58.7% 3% 6.9% 12.2% 12.2% 9.2% 30.0% 49.7% 2.7% 5.8% 15.3% 15.7% 13.7% 25.3% 13.8% 0.0% 4.2% 4.7% 7.6% 1.9% 33.6% 34.8% 3.2%

7 The Balance Of Supply&Demand In China(monthly) Annual Month Initial Inventory Output Import supply demand inventory Business inventory 2,013 January , February , March , April , May , June , July , August , September , October , November , December , , ,014 January , , February , , March , , April , , May , , June , , July , , August , , September , , October , , November , , December , ,

8 Research Program The region research of Thailand&Vietnam(monthly): Learn about the year-on-year change/month to month growth rate of the major producers tapping days and outputs. Southern Thailand cumulative tapping days increased by 9% over the previous year, production increased by 5%, The supply performance is normal from Jan to Apr. Dry rubber Tapping days Dry rubber yield Tapping days Annual Month yield (cumulative (cumulative (year to year) (year to year) year to year) year to year) 2013 April 3.0% 311.5% May 41.4% 30.7% 30.8% 16.2% June -10.0% -2.9% 11.0% 5.2% July -13.7% 2.6% 2.5% 0.5% August 6.5% -2.3% 3.4% -0.8% Septemb er 2.6% 14.1% 3.3% 1.1% October -30.3% -15.6% -2.1% -2.1% Novemb er -10.9% -7.2% -3.1% -2.8% Decembe r 30.7% 14.3% 0.6% 0.5% 2014 January 2.7% 13.8% 1.1% 2.8% February 4.3% 8.0% 1.4% 1.4% March Tapping Tapping stopped stopped April 39.3% 24.0%

9 Research Program The survey of monthly consumption and weekly capacity utilization: Tracing the terminal raw material consumption and raw material/finished goods inventory changes. The tire producers consumption growth rate is less than the seasonal data.it is still be the first choice for tire producers to reduce inventories and keep the tight balance of raw materials. Some of the producers are forced to cut back production as the response for the large stockpiles. The planed consumption in May was still less than usual, and the cumulative consumption decreased by 5% from January to April ;

10 Research Program 2014 Tire producer consumption situation(monthly) Chain relative ratio The actual consumption The planed consumption Tire inventory Days of tire inventory Rubber inventory in factories Days of rubber inventory in the factories January -20% -12% -16% -3% -2% 22% Februa ry -9% -7% -4% 28% -3% -23% March 35% 35% 1% -21% -5% -4% April -2% 0% 0% 0% -3% -4% May 3% On year to year basis 天 胶 实 际 用 量 Tire inventory Days of tire inventory Rubber inventory in factories Days of rubber inventory in the factories January -22% -37% -30% 13% 43% Februa ry -3% -20% -41% 7% 12% March -2% -20% -36% 6% 10% April -5% -34% -32% 1% 4%

11 Research Program The survey of domestic tire dealer inventories(monthly): Tracing the tire stock,another form of natural rubber inventories. The sales reduction lead to the increase of days of inventory;distributors were careful with the price falling, they didn t increase inventories; 天 50 Tire inventory 月 2 月 3 月 4 月 5 月 6 月 7 月 8 月 9 月 10 月 11 月 12 月

12 Research Program The inventory survey(weekly): Tracing the total inventories of natural rubber in the whole industrial chain. Prudent factories purchasing & high inventory 万 吨 12 Inventory in Qingdao free trade zone 一 月 二 月 三 月 四 月 五 月 六 月 七 月 八 月 九 月 十 月 十 一 月 十 二 月

13 Research Program The inventory survey(weekly): Tracing the total inventories of natural rubber in the whole industrial chain. SHFE warrants increased by 100% 万 吨 SHFE warrants thousand tons 月 2 月 3 月 4 月 5 月 6 月 7 月 8 月 9 月 10 月 11 月 12 月

14 Research Program Weather Soil Raw material purchasing Emotion Tire producers raw material purchasing(daily) Better combined with the short-term price changes Yunnan rainfall less than normal ; MM 400 Precipitation in Yunnan 14/15 作 物 年 度 累 计 降 雨 量 历 史 累 积 降 雨 量 景 洪 勐 海 勐 腊 思 茅 楚 雄 临 沧 耿 马 蒙 自 腾 冲 瑞 丽 广 南 * 勐 海 无 历 史 数 据

15 Research Program Tire producers raw material purchasing(daily) Better combined with the short-term price changes Positive correlation between purchase index and price Correlation between purchase index and SHFE prices 采 购 指 数 主 力 价 格 ( 右 轴 ) Purchase index was 1.21 in 14 th Feb.4.7%rise 15 th feb. Yuan/ton Purchase index was 1.21 in 10 th Mar.5%rise 2/10 2/17 2/24 3/3 3/10 3/17 3/24 3/31 4/7 4/14 4/21 4/28 5/5 5/12 5/

16 Part II:Trading strategy & cases

17 Trading strategy 1. Speculate 2. Arbitrage between month 3. Future-spot arbitrage 4. Domestic and foreign arbitrage

18 Trading strategy--speculate 元 / 吨 SHFE RU Price 上 海 主 力 月 SHFE 仓 单 ( 右 轴 ) 吨 [ 值 ] 吨 Sell from the end of 2013 [ 值 ] 元 logic: Deliverable inventory up to historic highs; Supply growth is greater than the demand growth in 2014; Seasonal supply high for September delivery ; End of the purchase; compound rubber is more cheaper

19 Trading strategy--arbitrage between month 元 / 吨 SHFE Spreds between 1309 and 月 1 月 SHFE 仓 单 ( 右 轴 ) Shor 1409 Call 1501 吨 logic:2012 warrants can't delivery in 1401

20 Future-spot arbitrage compound rubber price in Qingdao 美 元 / 吨 美 金 复 合 升 贴 水 胶 水 - 白 片 ( 右 轴 ) 泰 铢 / 千 克 /2/7 2014/2/ /2/ /2/ /3/7 2014/3/ (100) 0.0 (200) (300) (400) (500) (600) 14 年 2 月 -3 月 : 买 复 合 现 货 卖 SHFE logic:stop tapping period,raw material prices in Thailand rised;domestic warrants record highs;the spread lead to buy-back; Financing business start inquiry

21 Domestic and foreign arbitrage 美 元 / 吨 :call TOCOM short SHFE Spreads between SHFE and TOCOM SHFE-TOCOM 胶 水 - 白 片 ( 右 轴 ) /1/ /2/ /3/5 2014/3/ :call SHFE short TOCOM Call TOCOM ShortSHFE: stop tapping period,raw material prices in Thailand rised;domestic warrants record highs;the spread lead to buy-back;yen went down Call SHFE Short TOCOM:Field latex premium 泰 铢 / 千 克

22 PART III:Viewpoint

23 State of the market at present Cautiously bearish Supply: According to the chance of planting area, we expect global supply increased by 6% in 2014; According to the investigation, rubber is still one of the most popular economic crops in Thailand, and Vietnam. And local consumption level is low, rubber farmers bear ability is strong

24 Demand: By the end of April, rubber consumption fell 5% for the worst year since 2010; It is hard to reduce tire inventory,some cut ex-factory price by 3-8%, but the effect of stimulation is limited, and some cut capacity utilization; Futures prices rose last week, but the purchasing intention is still low; Distributors opinion is negative,they cut sales forecast,and keep low inventory; Heavy truck sales are flat ;

25 Inventory and spread: SHFE warrants increased by 100%, forward futures premium structure may result in the inventory continue to increase; Unable to digest premium SCRWF ; Pay attention to: Will El nino aggravate drought situation domestic and abroad? SRB purchasing? Policy changes about compound rubber? Macroeconomic performance better?

26 Thanks!