Daily News Summary

1. **Commodity Market Midday Review**: Container Shipping and Glass Remain Strong, Crude Oil Falls by 4%

The commodity market is experiencing mixed movements, with container shipping and glass continuing to show strength, particularly container shipping which has risen by over 6%. Crude oil continues to decline, with a drop of 4%. Analysts point out that the key to container shipping transactions lies in whether shipping companies' price support at the beginning of November can be successfully implemented.

**Key News Roundup**: Another Deposit Rate Cut? Market Expects It May Be Implemented This Month to Offset the Impact of Reducing Existing Mortgage Rates. On October 15th, there were market rumors that Chinese banks are about to cut deposit rates again soon, possibly to be announced this week. Although the official responses from the banks inquired by reporters have not yet confirmed this, some banking insiders have indicated that there is indeed a possibility of a rate cut in the near future. An insider from a joint-stock bank told reporters that the bank had originally planned to further reduce deposit rates after the National Day holiday, but no changes have been made so far. He expects that it is quite likely for regulatory authorities to guide banks to adjust deposit rates in the near future. This is also to offset the impact of the upcoming downward adjustment of existing mortgage interest rates on banks' net interest margins. Previously, authoritative experts predicted that as the effects of the current interest rate cut and reserve requirement ratio reduction policies gradually take effect, deposit rates will also be adjusted accordingly, which can further reduce the interest burden on banks. Therefore, the overall impact of the reduction in existing mortgage interest rates on banks' net interest margins is neutral.

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The current focus of EC transactions is whether the shipping companies' price support at the beginning of November can be successfully implemented. Currently, according to the price increase letters published by Maersk, CMA CGM, and Hapag-Lloyd, the large container rates at the beginning of November have basically been raised to around 4500 USD. On Tuesday, MSC issued an increase announcement for DT space, raising the large container rate to 5000 USD. DT space is not included in the SCFIS Europe line index, but it will boost the current market's expectations and sentiment for shipping companies' price support. COSCO also issued a price support for November, with a large container quote of 4825 USD, which is basically the highest quote among shipping companies for November. Looking at Maersk, which was the most aggressive in price reduction before, it has significantly increased by 1900 USD from the large container quote of 2600 USD announced in week 43, with an increase of 73%. From the current supply and demand situation, it does not support such a large price increase by shipping companies. On the one hand, the volume of goods has not shown a significant increase, and on the other hand, the enthusiasm of shipping companies to actively control capacity does not seem to be so strong. At present, the strength of EC is mainly driven by strong expectations, and whether these expectations can be realized remains to be verified. It is not recommended to chase highs in the short term, and it is important to continue to pay attention to the subsequent price support and active capacity control by other shipping companies.

Nanhua Futures: Marginal Changes in Glass Observed. The main glass contract has risen by more than 4%, reaching a high of 1336 yuan/ton.

Under the macro policy and expectations from the Ministry of Housing and Urban-Rural Development meeting on Thursday, the glass market has surged, with a premium of over 200 in Hubei spot and over 100 in Shahe spot. After the macro sentiment fades, it is expected that trading will return to the fundamental logic. At present, the daily melting of the glass supply side is still at a relatively high level of around 162,000 tons, and the cold repair on the supply side has accelerated since September, with unexpected cold repairs also occurring. However, we believe that the current degree of upstream clearance is not enough to change the supply and demand contradiction of the industry chain. From this perspective, glass still faces certain downward pressure. The significant increase in the market before the National Day holiday and in recent days has provided a good entry opportunity for futures and spot merchants. From sales, it can be seen that the speculation in the middle reaches has significantly increased, and data also shows that the inventory of glass factories has also been transferred. However, the actual fundamentals cannot keep up with the situation reflected by the market price. Subsequently, we believe that the deep processing situation of glass still needs further observation. Data at the end of September showed that both deep processing orders and original piece inventory have exceeded expectations, which needs to be kept in mind. This may determine whether the glass price can have higher flexibility under the current policy background.

Everbright Futures: Crude Oil Market Supply and Demand Expectations Weaken, Short-term Volatility Increases

The IEA has revised down the global oil demand forecast for 2024 to an average of 102.8 million barrels per day, lower than the previous forecast of 103 million barrels; and for 2025, it has been revised down to an average of 103.8 million barrels per day, lower than the previous forecast of 103.9 million barrels. From the balance sheet perspective, the EIA expects that there will still be a large supply and demand gap from the fourth quarter of this year to the first quarter of next year. However, the IEA balance sheet shows that the global crude oil market will shift to a state of oversupply starting from the fourth quarter, with OPEC+ gradually increasing production and limited demand growth under the impact of new energy, the oversupply situation next year may further deepen. The main factor is still the lack of confidence in future demand expectations. Against the background of recent macro sentiment improvement and Middle East geopolitical disturbances, there are signs of oil price recovery. It is expected that short-term oil price fluctuations will still be large, but the sustainability of geopolitical premiums remains to be observed. After entering the off-season for demand, if there is no unexpected supply and demand data support, both domestic and foreign oil prices may weaken again.

2. In the short term, due to the uncertainty of geopolitical risks, oil price fluctuations will still be violent

On the supply side, the recent military operations by Israel against Iranian energy facilities have temporarily eased, and the geopolitical risk premium has weakened. However, in the short term, the market will still trade Middle East geopolitical risks, but there is not much room for a significant surge in oil prices, unless Iran's oil facilities are attacked, causing an interruption in oil supply; on the demand side, the latest monthly reports from OPEC and the IEA have both lowered global oil demand forecasts, and the trading atmosphere is weak. Overall, institutions have successively lowered their oil demand forecasts for this year and next year, and oil prices are weakly operating. It is expected that due to the uncertainty of geopolitical risks in the short term, oil price fluctuations will still be violent. At present, Libya's production capacity has basically recovered, and production in the Gulf of Mexico has also returned to normal operation after the hurricane. In December, OPEC+ oil-producing countries will successively increase production, and oil prices will continue to bear downward pressure in the long term.

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