Poker Interview | Yan Dong: As the story is irrelevant, “brewing” behind the surging natural rubber has oversold it?

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Lead: What causes Rubber its decline so ferocious?

Interview Guest | Lin Wo rubber Yan Dong reprint please contact the poker author Jun (ID: puoker) Authorization

key point:

after nearly two weeks of continuous decline around after the rubber finally today
fell circuit breakers.
As led by species, the rubber is what causes its decline so ferocious?
Are changes in fundamentals?
Impact of the macro side?
Or face the withdrawal of funds?
Whether fell to 13,600 rubber and dip of space?
In this case, in the disk, how to operate?
Today, poker content teams invited Yan Dong Lin Wo rubber, for everyone preaching Tuition FAQ.
.

1 believe the main reason for this wave of decline in three aspects: First, are now at a
overall commodity callback stage; the second is the rubber itself weak fundamentals; three is facing a 1711 contract delivery pressure, faced with after the pick, how to digest the full latex this problem.
At the same time, imported glue kind of poor tax issue full latex is mixed with glue, also need to look oversold to resolve.

2. From the overall supply and demand situation, from a global perspective, demand side as of August, global demand grew by only 0.8% level, but in the supply side, growth is more rapid
, before August exports up by national associations ANRPC 9.4%.
Such global supply and demand side, will determine the natural rubber does not have the conditions to rise sharply.

3. Follow-up on weather conditions (particularly rainfall) this problem requires sustained attention.
In addition, after the price fell too low, tapping willingness to whether the decline thus affecting the overall supply is also a concern.

4. Value funds tend to depression, but the so-called value of depression, and must meet the terms of the story.
For now, we do not expect to go along with the story.
I think before the 1711 contract delivery, very difficult to see a significant rally, after the end of the 1711 contract, 1801 will depend on the specific point where.
If 1801 12,500 or less, may be some degree of rebound, but the rebound is I think not more than 15,000 line.

5. Individual investors in the disk operation, is more difficult.
However, traders can still spread the firm will continue to shrink, make the appropriate configuration positions.

PUOKE Interview Speaker Profile

Yan Dong, head of commodities research for nearly a decade of experience, worked at Verizon Holdings purchase and any analyst
.
Macro research, monetary policy, nonferrous metals and plastics market analysis of good.

full interview with:

➤ Poker Finance: Recently rubber all the way down today
it is down only circuit breakers, this, how to understand?

Chi Yan coffee winter: I think that this wave fell, led by rubber as a species, is indeed a spectacular fall, very fast, even
do not give chance to escape.

I have three ways to analyze this wave of fall:

First, to analyze the background from large commodity.
Now at a stage of total goods callback, and the reason why the case of collective goods adjustments occur, mainly because of the international and domestic macroeconomic macro side there are some common signs of weakness and expectations.

The Fed is expected to table a progressive reduction familiar to everyone.
Domestically, M2 growth rate continued to drop, gradually bring the effects of “time lag” economic heat receded.
At the same time, the domestic capital side at the time of the end of September, there will be a quarterly assessment, resulting in capital and tight.

In addition, the market also now more stringent regulation.
You can see, this morning, CCTV news, also reported “18 PVC enterprises due to monopoly fined 457 million yuan,” the news, which can explain, regulators for the market speculation, manipulation and excessive for some commodities
emotional rendering, supervision is relatively large, there will be some pressure measures.
As a result, it led to the overall decline of market speculation sentiment, speculative demand will have a corresponding reduction.

recent real estate regulation and other factors, but also bring some impact on the market sentiment.

Second, the rubber itself weak fundamentals.
For this, mainly to understand the whole industry chain profit from the conduction angle.
It can be seen this year, tire pressure plant is very large, although the tire plant in July and August, were the series of price increases, the end of September until now, the major tire factory also introduced the policy in October to continue to represent
price increases.
But the problem is, on the whole, the profit level of the tire plant is still very weak.

Association of 41 companies, 13 have a loss, the overall level of profitability compared to last year, down more than 60%.
On the one hand is the cost to do the work in the first half of the control is not in place, did not purchase the rhythm Tazhun, on the other hand is a sharp rise since the second half of carbon black additives cord of these materials has pushed up the cost of production in order.
While environmental expenses also increased a lot, and some companies buy a device other than the smell would nearly ten million.

In other words, although the tire plant are price increases, but still can not cover the rising costs of magnitude, it can only go to the final chain of rubber to bully the weakest, because it does not ”
supply side “concept, well known and increase trend.
The main sources of supply in Southeast Asia, “weak state has no diplomatic.”

again from the overall supply and demand situation, from a global perspective, demand side as of August, global demand grew by only 0.8% level, but in the supply side, growth is more rapid.
To Thailand, Malaysia, Indonesia, the three countries, the first eight months, compared to last year export growth rate was 9.2%.
So, this global supply and demand side, will determine the conditions for natural rubber will not have to rise.

Third, from the perspective of futures contracts to analyze why such a big decline, even such a situation limit.
1711 delivery contract itself faced with the pressure of 30 tons of old glue is real to be “ugly wife to see her,” the end of the 1711 contract, 16-year-old glue must face the reality into cash.
After the pick, how full latex digest?
But also a problem.
Meanwhile, the tax difference is also a problem.
Full domestic latex is 11% of tax receipts, while imports of Vietnam 3L rubber stamps is 17%, so in the market, full latex increasingly unpopular, hard to concentrate to digest.
This also led to the delivery pressure ahead of the outbreak, and for now, is in the pre broke out, there have been cases abandoned disk.

For the 1801 contract, its own premium is too high, premium spot was 3,500 yuan, now down to 2000 levels and more, in fact, is still at a higher premium situation.
The cause of the high premium, mainly because in the early days, there is a subsequent market may be some production is expected in the supply, but then three conference has poured cold water on such expectations shattered.

Currently more than 2,000 liters of water I think it is unreasonable, I like to use a word, “chips premium”, 1801 because the term may be extended, maneuvers long period of time, and therefore have a “bargaining chip value”, but if the funds expected
late fundamentals will not improve, accordingly, the premium chips also will be weakened, eventually, might just return to that level than backwardation 800-1000.

➤ Poker Finance: How to follow supply and demand side situation?
What changes will happen?

chi coffee color Winter: after eleven, such a situation of supply and demand is.
Because in August and September, especially during August, the domestic futures price is relatively high, with the gap between the stock reached more than 3,000, so at the time, caused a lot of arbitrage.
Behavior patterns arbitrage, that is to buy the yuan mixed glue, glue mixed cargo, Vietnam 3L standard rubber, such as plastic, then short in the futures market.
The consequences of this behavior is caused, in September and October, the amount of Hong Kong will be very large.

For this, the outlet from the data, can get a better verification.
In July, Thailand’s exports to China by 21 million tons, but in August, total exports reached 36 million tons.
Vietnam’s exports to China, in July, August and September, three months, also hit a record high in a row.
1–8 months, the entire number of Vietnamese exports to China has reached more than 590,000 tons this size (total exports 800,000 tons).
At the same time, Indonesia’s exports is an increase of more than 15%.
Later this year the basic goods without fear of missing.

On the demand side, from the domestic situation, in the year next time, look forward to supporting tire performance is good, because the new car vehicle sales, including heavy trucks, is good.
But most of the replacement tire market, the performance is rather poor, because at this stage, the entire cargo freight market has been relatively sluggish, willingness to change tires truck drivers would not be very high.
After cycling capacity decrease tire wear is also reduced, probably 6-8 months before you need to change the tire, and now it may be 12 months or so only need to change a tire.
Reduce the overall frequency of tire replacement, will now lead the entire tire inventory is re-accumulation.

In addition, the export market may be a little follow-up will improve some of the market’s overall export growth this year is 1.8 percent, although that is lower than expected, but since there is good growth.

From a global demand perspective, from the point of view of data now available, the performance is slightly better in Europe, European truck sales overall increased by 4% increase in tire demand also exceeded the 3%
but the United States has appeared in the case of demand decline, India’s demand is not very good.
Brazil and Iran is the highlight, the tire needs are increasing by more than 10%, but the impact is limited.

➤ Poker Finance: now, compared with futures disk crash, stock situation how well?

Chi Yan coffee winter: Today limit down, offer little meaning.
Until now, the spot is not how substantial turnover, after all, offer buyers and sellers difference is quite large.
Areas such as Yunnan, Xishuangbanna marked the second rubber price 11,500, traders Jiangyin in front of 11,200 limit would also like to buy, but now, offer 11,000, may have gone, many traders do not even offer to wait until the evening
how to re-opening the case observed, then consider pricing issues.

situation abroad, the closing price from the point of view of Malaysia noon, noon to close at US $ 1428, also down about almost 100 dollars.

➤ Poker Finance: market outlook, what other factors have an impact on rubber prices?

Chi Yan coffee winter: on supply, the most uncertain factor is the weather.
Last year, a wave of big market, rose to 22,500 from 18,500, because the flood was caused by panic.
So, whether there will be such a situation this year?
Or, even if the flood does not appear, but too much or too little rainfall, but also will have some impact.
Therefore, weather conditions, the need to maintain sustained attention.

The second factor is that, after the price fell too low, tapping the will certainly decline, the overall supply also will be affected.
China in the fourth quarter, there may be some measures to safeguard stability, we will convene as soon nineteen large, the main tone of the overall maintenance of stability of GDP did not change.
For funds to support infrastructure as well as the attitude of the chain, it may still be warmer.
Maintenance of stability at the macro situation, had faced commodity collective collapse, the probability is not very high.

➤ Poker Finance: You mentioned the issue of tapping the will, so now is whether the level of the spot has touched
Some rubber farmers or traders cost line of it?

Chi Yan coffee winter: is the case, these regions as Thailand, Indonesia, Malaysia, rubber farmers are small and medium-based, family-style
business model, strictly speaking, there is no question of cost, as long as the family can maintain basic living, it will not cut trees phenomenon.
And, for some remote areas, where there are no factories, no industry, and ultimately it can only choose to plant rubber.
But if the income planted gum trees already lower than the standard minimum wage, the situation might lead to abandoned mowing.

At present, the situation is still possible.
Thailand reported today glue or fifty baht, generally down to about forty baht, revenue will be lower than the minimum standard throughout Thailand.
Malaysia, the Government also has a lot of subsidies, rubber farmers income also possible.
Hainan is expected this year as the country had 50,000 tons increase appears now not so optimistic, the output will be less than 38 million tons.
But the situation will not be like the Yunnan region as Hainan, Yunnan is also based on small rubber farmers mainly costs are relatively low, the overall open area increased by 8% this year to cut production by around 4% no problem, estimated to reach 450,000
tons more.

➤ Poker Finance: The idea that the performance of rubber compared to other species is already oversold
subsequent stage should be a stabilizing excessive seek direction, which, how do you see?

Chi Yan coffee winter: Actually, this is a continuing problem.
Certainly some value funds tend to depression, but the so-called value of depression, but also in terms of distribution and stories.
For now, we do not expect to go along with the story.

The story of the early hype is heavy truck, also fired more than a year.
For example, there are three cut speculation conference, which is to restrict exports of the meeting, now dashed.
So, now we need to find new stories, but also more difficult.
And, after the previous rounds of speculation, everyone’s state of mind may have been fatigue.

Follow the money trail How?
Or need a new theme, after all hope of funding, is icing on the cake, I want to come out after the market after the technical conditions to re-adjust, and then say something about the story of the funds.
But now stuck dish so much, I am afraid that no one is willing to do the PLA.

So, I think, before the 1711 contract delivery, very difficult to see a significant rally, after the end of the 1711 contract, 1801 will depend on the specific point where, if the following 1801 12,500
, there may be a certain degree of rebound, but the rebound is not more than 15,000.

➤ Poker Finance: in the disk operation, if there is any advice you can share with us?

chi coffee color Winter: the current market, the disk operation is more difficult.
In fact, when more than 20,000 position in the market, I would suggest that you do it is empty, there is little to do more idea.
Early short course, there will be some Fukui in August rose to 17,000 for a long time, but now look, short of ideas or proven.
But now at such a low point, and then suggest that you go short, it is not rational.

In the early days, I have always said that since 1801 there is great uncertainty, you can select the 1711 contract to do the most determined, for now, is relatively good strategy.
But the same is now down to this point, coupled with 1711 contracts may be the final settlement price of around 10,500 point of view, the bottom is not much space.
So, in futures disk, do not give advice.

But for traders, the firm can still spreads will continue to shrink views.
Although the price difference has been reduced to more than 2,000, but I personally think that there is room late around 1,000 points, the reason I have mentioned earlier, the whole latex in the market, really unpopular.

A few years ago, Ningbo, Hangzhou, two in Hong Kong, Vietnam imports of plastic each year only 1-2 million tons, but now, Hong Kong, Hangzhou, Ningbo, Hong Kong’s imports reached 100,000 tons, Shanghai port reached
more than 20 million tons this year, Shanghai Port imported mixed adhesive 33 million tons, an increase of 32%, is the main source of Vietnam 3L mixed.
Some products factory in Jiangsu and Zhejiang are more willing to use glue Vietnam, are reluctant to use full latex.
This situation will lead to the goods after receiving full latex may be two or three years to digest.
In other words, it must be based on full latex prices to compete with low price to sell to get out.

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