Nanhua Futures(SH:603093) Nan Hua Qi Huo·2025-06-04 13:32Investment Rating No investment rating for the industry is provided in the report. Core Viewpoints - The log market is expected to continue its weak and volatile pattern. It is recommended to operate within a range, focusing on high - selling and low - buying. With 14 days remaining until the option expiration, attention should be paid to the subsequent decay of time value. It is advised to sell lg2507C800 at high prices and lg2507P750 at low prices. If the market drops significantly, consider buying lg2507C775 at low prices. The 09 contract, corresponding to a relatively seasonal peak season, presents a chance to buy on dips [4]. Summary by Relevant Content Log Price and Volatility - The monthly price range forecast for logs is 740 - 800. The current 20 - day rolling volatility is 16.28%, and the historical percentile of the current volatility over 3 years is 67.4% [2]. Hedging Strategies Inventory Management - When log imports are high and inventory is at a peak, and there are concerns about price drops, for long - position inventory, it is recommended to short log futures (lg2507) at a 25% hedging ratio, with an entry range of 800 - 785. Also, buy put options (lg2507P775) at a 50% hedging ratio with an entry range of 9.5 - 14 and sell call options (lg2507C800) at a 50% hedging ratio with an entry range of 4.5 - 7.5 to lock in profits and cover production costs [2]. Procurement Management - When the regular procurement inventory is low and procurement is to be done based on orders, for short - position inventory, it is recommended to buy log futures (lg2507) at a 50% hedging ratio, with an entry range of 750 - 800. Sell put options (lg2507P750) at a 75% hedging ratio with an entry range of 5.5 - 12 to prevent cost increases due to price hikes and lock in the purchase price [2]. Market Conditions of Contracts - The 09 contract increased its positions by 1758 lots, dropped 1.2%, and broke through support levels, but its total open interest is still less than 10,000 lots, indicating weak liquidity and poor market - taking ability. The 07 contract reduced its positions by 829 lots, dropping 0.98%. The main contract will gradually shift to the 09 contract this month, and attention should be paid to the monthly spread changes brought about by the position - shifting [3]. Supply and Demand - In the 22nd week, 11 vessels of New Zealand logs are expected to arrive at 18 ports, 2 more than last week, a week - on - week increase of 22%. The total arrival volume is about 372,000 cubic meters, 33,000 cubic meters more than last week, a week - on - week increase of 10%. There is currently no sign of a decrease in arrivals. The ex - works price in May was 110 US dollars, with brisk transactions, and it is expected that arrivals will remain high. June - July is the off - season for downstream consumption, and there is expected to be some pressure on the outbound volume. The latest ex - works price is 110 - 112 US dollars, a 2 - dollar increase from the previous period. There are no signs of a weakening in foreign quotes. Traders' losses have not been recovered, and they have the intention to jointly support prices. The futures price is at a discount, and there is no profit in selling for hedging, so there is no strong motivation to sell on the futures market [4]. Factors Affecting the Market Bullish Factors - Traders have the intention to jointly support prices due to continuous import losses, macro - policy efforts, and an overall improvement in commodity sentiment [7]. Bearish Factors - Demand is weaker than expected, and the goods movement is slow. There will be an increase in subsequent shipments [7]. Price and Data Overview - The report provides price data for various types of logs at different ports, including 3.9m medium (3.8A) logs at Rizhao Port, 4m medium (3.8A) logs at Taicang Port, etc., along with the calculation method for the basis [8]. - It also presents a comprehensive overview of log data, such as radiation pine imports, port inventories in different regions, daily average outbound volumes at ports, import profits of radiation pine and spruce, and prices of major spot logs [9].