Ruida Futures: The Prices of PB Increase a Lot, Cautious about Buying at High

Sunsirs: Oct 8

Ruida Futures: The prices of PB increase a lot, cautious about buying at high

Foreign and domestic trend: Today, the price of PBD swings lower slightly. At 15:16 (Beijing Time), the price of PBD for 3 months is 2,176USD/t, the daily decline rate is 0.21%. PB1911 swings at high, the price today is 17,280-17,075RMB/t, the closing price is 1,705RMB/t which is 1.68% more than that of yesterday. 38,928 lots are traded, which decreases 19,112 lots; Open interest is 55,998 lots, increases 3,408 lots. The basis narrows to -80RMB/t; The monthly price gap between PB1911 and PB1912 decreases to 70RMB/t.

Market focus: (1) In Asian market, Dollar Index swung to low slightly, trading at 99.961, decreasing 0.01%. (2) Liu He will lead a delegation to Washington and hold a new round of Sino-US economic and trade consultations with the US trade representatives from Oct 10 to 11. (3) Trump said he would like to see the federal reserve carry out a ‘sharp’ interest rate cut because the United States lacks inflation.

Spot market: On Oct 8, the SMM spot price of 1# lead is 17,050-17,200RMB/t, the average price is 125RMB/t higher than that of the last trading day. According to SMM, most holders are active in quoting and selling, but many refineries have accumulated stores after the festival, the spot prices are higher than the futures ones. The downstream is fearful of high prices and hold a wait-and-see attitude, the demand for replenishment after the festival is limited, and the trading of scatter market is quiet.

Warehouse stock: today, the warehouse receipt of PB is 11,705 tons in total, decreasing 101 tons daily; On Oct 4, the stock of PBD was 69,175 tons, decreasing 50 tons daily, it has decreased 13 consecutive days to a new low since July 30. Till the week (ends on Sep 27), the stock of lead in Shanghai Futures Exchange is 15,796 tons, decreasing 4,803 tons that week, it has decreased for 8 consecutive weeks to a new low since Dec 28, 2108.

SVZL: PB1911’s long position of the top 20 is 21,777 lots, the short position is 21,581 lots. The net short position is 196 lots, increasing 134 lots one day. The trade of long position and short position is evident.

Market study and determine: On October 8, PB1911 jumps higher, hitting a new high since Sep 16. During this period, a new round of Sino-US trade negotiation is coming. The market is expected to boost the lead prices. At the same time, the lead market is basically good. LME lead inventory has dropped 13 days to a new low since the 2 months. This shows that consumption support in the downstream of lead market still exists which is benefit to lead prices. In the term of spot, most holders are active in quoting and selling, and refineries after the festival have a certain accumulation of stocks, the spot prices are higher than the futures ones. The downstream is fearful of high prices and hold a wait-and-see attitude, the demand for replenishment after the festival is limited. Technically, PBM returns above the average line group, MACD green column shortens, Williams' Percent Range swings to high, the short-term performance is expected to remain strong. Operationally, it is suggested that PBM should buy low and sell high at 17,000-17,300RMB/t, and stop loss 100RMB/t.

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