Poker Interview | Fanyan Wen: Speaking from the source – whether it is capital or a demand-driven rally rubber?

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Lead: opened rose again, do the rubber really want God?

Wen | Shanghai-Jun-Rubber Company of Futures Research Investment Director Fanyan Wen reprint please contact the poker author Jun (ID: puoker) Authorization

opened rose again, do the rubber really want God?
Is it really underestimated demand for rubber?
Are you really should wait to do more low approach?
Today, poker content in the squad Fanyan Wen, director of futures exchanges and investment research department Shanghai-Jun-Rubber Company, she says, “One is an inherent amount remained stable demand, on the other hand is no way to improve the operating rate, ultimately,
there have been demands can not be relieved in a short time, gave mARKETS able to digest plant materials confidence or supply of raw materials. now for the analysis of the operation of unilateral market, still is not controllable. “

key point

1. recently rubber day volatility is on the increase of the process, the rubber may also be wheeled in which the entire process of goods, capital gradually to its
tilt boost its rise.
On the other hand, there have been similar to last year to buy the goods they buy the plant can actually use less resources, there has been a mismatch between supply and demand in the short term.
From an environmental point of view, also contributed to the demand side of the elastic change.
These factors led to the fiery market of rubber this time.

2. From the long-term perspective, and is not supplied is less optimistic side rubber support reform.
For subsequent ability to rise to 18,000 or even to 20,000 points, held by a skeptical attitude.

3. Consider the demand side there is no big change, one is an inherent amount remained stable demand, on the other hand is no way to improve the operating rate, ultimately, there have been not in short demand
be eased within the time, it gave mARKETS able to digest plant material or feedstock supply confidence.

4. The overall market situation of supply exceeding demand by 2020, it should be very difficult to change.
But at every stage of the year has a different story, different factors, this is a cyclical supply and demand determine the problem.
.

5 follow-up should focus on: the first factor, the weather is.
Second, the question of national policy side wheel storage.
Third, it is the problem arbitrage funds.
Fourthly, it is out of stock now overlay the entire area and then superimposed cargo shipment financing problems.

6. Disk operation, might prefer technical.
If the market can continue to break such as Monday, then go look at the movements of funds, and then decide more than a single continue to hold rallies short or consider doing a follow-up operation in the important pressure.
Now consider for the analysis of the operation of unilateral market, still is not controllable.
At this stage, as the investor is concerned, should probably prefer to do Basis trading mode is more secure operation.

PUOKE Interview Heavy guests

Fanyan Wen, Shanghai-Jun-Rubber company investment department director of futures research.
Four years experience in futures, spot four years of experience, dedicated to in-depth market judgments, the industrial chain of the current combination of investment strategies and planning for the company’s hedging program plan, and control of enterprise funds, import and export trade risks.
He has published feature articles on “Futures Daily” and “new financial observation”, “Securities Times” and many other newspapers and networks.
2011 2012 reelection won the Futures Daily and Securities Times organized the fourth, the fifth session of the China analyst at the best selection of natural rubber analyst and Shanghai Futures Exchange, natural rubber excellent analyst.
2013–2014 the Shanghai TV “Oriental Financial – Trading Frontline” program broadcast invited guests.
2016, as a special guest First Financial “Futures Weekly” column, on the rubber market made a brilliant analysis and judgment.

full interview:

➤ Poker Finance: You can see today the opening rubber strong upward again, this time rising thrust
What is?

Guests Fanyan Wen: Personally, I mostly think that this time the rubber market hot, in fact, the elastic plate may be larger, increase on Friday
warehouse up, it is estimated more or favored funds.
In particular, we can see that day volatility has rubber is on the increase during the same time, from the beginning of last week, the black money is also constantly pulled out, it can be said every day can have several hundred million in funding
out of the outflow.
From each breed’s performance, capital strategy now seems to be doing what breed it is not pushed up, it will go to boost their prices, such as cotton, chemicals and silicon manganese some time ago, these previously unrecognized
can or can rise slightly related species with environmental issues.
Rubber may also be wheeled in which the entire process of goods, financial gradually inclined thereto.

Many investors have also been emphasized, rubber fell from more than twenty thousand points all the way to the location of more than ten thousand, and indeed there should be a rebound.
External funding from the performance point of view, this is also expected to make the appropriate action.

On the other hand, I think it is the recent case of rubber fundamentals is in the process of an ever-changing.
Especially now that the spot market liquidity problems, in fact, can make the goods turnover between the real and the resources to flow to these dollars in the plant, by comparison, it is relatively lacking.
As a result, the plant also appeared similar to last year to buy the goods they buy less than the actual resources that can be used.
This is the short-term changes in supply arise.

However, this wave of rising, there are many factors that can be said is staged in the short term lead to a mismatch between supply and demand distribution.
The key, though may still be rubber from the supply side aspect is concerned, it has not affected, but the environmental point of view, change, or promote the elasticity of the demand side.

➤ Poker Finance: You have said before, the day the second half of the rubber is too bad, but for now, many people are never short into the long, then, how do you view
?
Are still insist on the idea bearish?
why?

Guests Fanyan Wen: is that, in fact, I began to have a report last month from several public’s point of view I actually started to have some changes
If you have to observe carefully, you should be able to see some doorways.
In fact, my view is not so direct all aspects into consideration, at this stage we can not say there is an inevitable fall or rise, moreover, unilateral or unilateral increases down now in fact is not so important.

Now volatility rubber plate can also have about 1,000 points, or within two or three days the stock market may also reach 1,000 points, this is the case, then the market trend will not be temporary
become a trend of the force.
At this point, we should focus on, based on the carry trade is still poor, it is relatively obvious.
At the same time, so the stock market, trading patterns also make the whole industry chain of rubber, it has changed.

Review 11– market at 12 years, when the rubber disc financing is also very large, then it is for a transaction model approach, with the virtual disk market, the entire basis is no return
under the circumstances, the dummy disc is also continuously accumulated time is extended.
Will be reflected in the moment so that we might think, there is no difference in the return of the base case, will not see the spot, but the fact is that these resources have been in the market is still inside.
So, from a long-term perspective, I was not too optimistic about the rubber supply side reform is not supported.

However, on the short term, from last week’s level of around 16,300, failed to break down a few times to this point.
This, it is transferred from the atmosphere funding point of view from black to colored and then transferred to other species, and that rubber would also have pushed the probability of the existence of the funds.
So, if you asked me last week to see how the rubber, then I might say, it also has a little bounce space.
However, from the point of view of rubber performance today, one breath to break through 16,700 to reach 16,800, and even reached 17 300, as some follow-up can really view that the market could rise to 18,000 or even to 20,000 points yet?
I personally, is holding a skeptical attitude.

➤ Poker Finance: There are arguments from the perspective of demand, that the demand for rubber this year is undervalued, how do you think demand this year?
Whether undervalued?

Guests Fanyan Wen: In fact, the rubber demand both from the supply point of view or departure, did not need to be identified as overvalued or undervalued, including the price
same.

The market price is a constantly evolving process, for example to illustrate.
In the beginning of this year, the price of rubber has dropped from twenty thousand to sixteen thousand, at that time, we have reduced supply estimates had just finished a correction, we expect to reduce the original amount is a lot, but later discovered that in fact did not
as expected decrease.
Followed by another wave after wave of market prices fall completion, we want to re-buy the dips back again, but at this time and we found the entire consumer end markets, great strides forward as failed as expected.
In other words, the entire consumption of heavy trucks and failed as overdue, within a few months completely broke.
We need half the original estimate of time to do incremental, and now come back to see, in fact, spent a year’s time to talk to the replacement market to do with the rotation of the incremental demand.

So you can see, in the first half, we expect the supply side has gone wrong and later was amended, the demand side is also the same as expected failed to focus on the outbreak, the final correction ended.
Two stages in the first half, from 22,000 to 16,000, and then fell to twelve thousand from sixteen thousand, during which his wife might have a lot of hunters who put an end to them.
Now, the disk came back to the level of sixteen thousand, during which the demand side is really what changed?
I think it is no big change.

So, with overvalued or undervalued to judge demand is not very sensible and desirable.

you can see, each year China’s consumption of rubber are close to 500 million tons, the amount of these inherent actually always been there, and that these amounts, has been looking for in terms of both China’s own domestic market and export
balance.

If the recent improvement in demand in terms of words, export orders should be withheld.
We see from steel operating rates in June and July hovering below 65%, and even close to 60%, and more recently began to gradually slow recovery.
From a number of foreign-funded enterprises or joint venture the overall export situation, exports are good.
The domestic situation, including the situation of the supporting aspects, because the impact of environmental issues, as well as prices of some other accessories appeared very significant rise, therefore, from the market in terms of supporting the production of finished products out of profits has been a great
influences.

In the case of failure to price increases tire prices, factory production by one tire out, it can be said is contrary to its cost profit, that is to say, in this case, the plant is not profitable.
On the other hand, in environmental policy progress, some large enterprises in order to ensure the normal operation of enterprises, all indicators of environmental control in the normal range, there is no way to enhance the operating rate.
As a result, the operating rate has led to an entire half of the steel has remained at a very depressed state.
However normal terms, “Golden September and Silver October,” has come, the operating rate should be gradually increased to 80-90% level.
But now the situation is, tire factory orders is relatively good, but still in constant production allocated to the subsequent several months.

One is the inherent volume remained stable demand, on the other hand is no way to improve the operating rate, ultimately, it appeared demand can not be relieved in a short time, this can only maintain the current relatively
tight balance.
This also explains, in fact, does not mean that demand is undervalued, but at present such a stable state, giving confidence to be able to digest plant MARKETS raw material or feedstock supply.

➤ Poker Finance: Well, this year, the overall supply and demand situation of oversupply of rubber is able to improve?

Guests Fanyan Wen: I think, if it comes to oversupply get change, by 2020, it should be very difficult to change something.
Now is the peak of the planting and cut open, and according to the current price of the Chinese market, directly to the global mining and processing profits glue countries are in a very lucrative stage, including Indonesia, the increment can be said this year is very impressive,
incremental Malaysia, of course, is also very good, now the highest cost in Thailand, the overall processing profits are also constantly upgrading.
Although the exchange rate between the dollar Thai baht also in constant change, making profits in Thailand is slightly off, but at this stage the profit level is still very good.
And in such huge profit level, I think there should be no major producing rubber Congress to do what cut of the action.

At that time in June and in July, there are mentioned, the three main rubber producing a meeting on the state-owned rubber production cuts in September, also is to reconvene to discuss.
But the current situation, this meeting is not open or how the results are not important, because it was really hard to be in such huge profits, the price outlook to do in order to protect production, export restrictions action
.

So, this year, the oversupply situation still does not change.
Unless, appeared with the same situation last year, the weather changes, which is really no way to predict things.
But as of now, compared to the same period last year, overall rainfall is not as high as last year and set.
This is the case of the supply side.

again from the demand side is concerned, in fact, the annual global demand is the existence of a stable growth rate of 2-3%.

So, to summarize the situation with the supply and demand throughout the year, then the situation of supply exceeding demand, or will not change, but each stage of the year are all different stories, different factors, which
the decision is cyclical supply and demand problem.

➤ Poker Finance: What then the outlook uncertainty and change?

Guests Fanyan Wen: First, weather-related factors.
This point also mentioned above.
10–12 Yuefen should be a global high-yield period, will encounter similar to last year’s rainy season, or eventually ending normal weather, this is a factor of uncertainty and the factors affecting supply change.

Second, the problem of national policy side.
Earlier this year, the Thai government was in the best price when selling the government glue, and in most price downturn, in order to appease rubber farmers from market purchases of tobacco sheet a certain number of raw materials to support the stability of the market.
We can say that the Thai side of this series of actions, done is very nice, from the current price trend, are selling at the highest point, to buy at the lowest point.
So, the concept of the Chinese side of the reservoir when the wheel will actually implemented?

this year to the previous two years, the issue was repeatedly mentioned, related meetings have been open for several rounds, but has failed to reach a result, the time period set a final implementation.
That future, what will the government measures will not really push round the reservoir to come to Taiwan, is also a factor of uncertainty.
You know, the early rebound from more than 12,000 points to around 17,300 now, the price is very impressive.
State will first sell the old rubber tire out, then buy new plastic operation?
This time node and operating practices are uncertain factors.

Third, it is a problem arbitrage funds.
Now arbitrage funds is indeed very large, but for now, itself formed a relatively healthy digestive system.
So, from past experience, whether in a subsequent time period, basis rapid return, resulting in spot stampede appear?
In fact, whether the system is not perfect, or how large amount of funds have, as a commodity is concerned, the current return on conventional roads.
So in the current period of return on the road, it will eventually break through now such systems lead to stampede the spot market, which could be a follow-up to the biggest uncertainty.

Fourth, now in the bonded area, because in some of the seasonal normal digestion and better export orders, the relatively rapid consumption of dollars in resources, but the resources of the yuan outside the region, including the exchange of
and now the stock arbitrage cargoes, has been bought in December, January.
That is, they are in a steady stream of goods entering China, the stock has been in a process of accumulation, this is no way to ignore the problem.
Last year, we can say basically did not have much inventory, inventory this year outside the whole area now stack and then superimposed cargo shipment financing, might have reached 100 million tonnes.
This amount, how much demand there is the need to be able to defuse the pressure on the stock?
So, this is the future of an uncertain factor.

➤ Poker Finance: Based on the above analysis, how do you follow the trend of rubber think?

Guests Fanyan Wen: From an investment point of view of long-term, I still do not agree to continue to chase the action.
In the future should re-examine these uncertainties, it is not there is a greater upward pressure.
In addition, the change of direction of macro and financial point of view, can be said to have been a black mark as the risk exists, the Department recently quit black money, at the same time, there is suddenly a very prominent individual species, including today’s cotton and rubber
highlights, no one can deny that the financial side is not a lot to protect their exit smoothly, to push one or two species do the cover.
Therefore, we should always pay attention to trends in the financial side.

not a good trend since the third quarter, to ignore some of the risk factors that may exist in the fourth quarter.
Can not be expected because the market fell in the first half, the second half will certainly soar.
I think, in the rubber end of the third quarter, early fourth quarter should want to change an idea to think about the problem.

➤ Poker Finance: that so many uncertainties in the market, and in the disk operation, you have any advice you can share with us?

guests Fanyan Wen: on the disk operations, technical might prefer.
From a technical point of view the graph, beginning in August entering from the bottom of the rubber, indeed from the rising.
After the 1801 contract as the main contract, according to the golden line analysis, 24000-14000 from this draw a dividing line, then the rubber first rally objective is indeed level of around 18,000.
But if we go throughout the year from an average line considered, the level of 17300-17500, it has been more emphasis on the.

So, from a technical chart point of view, the subsequent changes in positions of funds should be focus on.
If the market can continue to break such as Monday, then go look at the movements of funds, and then decide more than a single continue to hold rallies short or consider doing a follow-up operation in the important pressure.

In addition, I personally think, for now analyze the operation of unilateral market, still is not controllable.
At this stage, as the investor is concerned, should probably prefer to do Basis trading mode is more secure operation.
Although recently has been hovering in the 3000-3500 spread of 09 will be faced delivery situation, but the carry trade is concerned, this case may also continue to hold a position or opportunity Opening stage.
Of course, to do this premise is that it should have a plenty of reserve funds, so that it is more secure.
Basis trading strategy can be used as a long-term holding and finally get a good harvest.

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