Nanhua Futures(SH:603093) Nan Hua Qi Huo·2025-06-05 10:42Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core View of the Report - The log market is expected to continue its oscillating and weakening pattern. Although the market has not shown a signal of stabilizing from the decline, the downside space is limited, and excessive bearishness is not advisable. Attention should be paid to the long - entry opportunity when the 09 contract stabilizes after a decline. Meanwhile, as the option volatility has slightly increased, attention should be paid to the opportunities of selling out - of - the - money put options and buying out - of - the - money call options on the 07 contract [3]. 3. Summary by Relevant Catalogs Log Price Range Forecast - The monthly price range forecast for logs is 740 - 800, with a current 20 - day rolling volatility of 16.28% and a historical percentile of 67.4% over three years [2]. Log Hedging Strategy - Inventory Management: For high log import volume and inventory, to prevent inventory losses, enterprises can short log futures (lg2507, sell, 25%, entry range 800 - 785) to lock in profits and cover production costs; buy put options (lg2507P775, buy, 50%, entry range 9.5 - 14) to prevent sharp price drops and sell call options (lg2507C800, sell, entry range 4.5 - 7.5) to reduce capital costs [2]. - Procurement Management: When the regular procurement inventory is low and procurement is based on orders, to prevent rising log prices from increasing procurement costs, buy log futures (lg2507, buy, 50%, entry range 750 - 800) to lock in procurement costs in advance; sell put options (lg2507P750, sell, 75%, entry range 5.5 - 12) to collect premiums and lock in the spot purchase price if the price drops [2]. Core Contradiction - Today, the 07 main contract increased its positions by 2057 lots and fell 1.58%, while the 09 contract increased positions by 813 lots and fell 1.16%. The spot price remained stable, and the basis strengthened. The closing basis was 35.1 based on the 8% over - length price of 5.9 - meter medium - grade A logs. In the 22nd week, 11 vessels of New Zealand logs were expected to arrive at 18 ports, 2 more than last week, a week - on - week increase of 22%, with a total arrival volume of about 372,000 cubic meters, an increase of 33,000 cubic meters from last week, a week - on - week increase of 10%. The May FOB price of 110 US dollars had active transactions, and subsequent arrivals were expected to 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 FOB price is 110 - 112 US dollars, a 2 - dollar increase from the previous period. It is difficult to see a weakening of foreign quotes. Traders' losses have not been repaired, 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 [3]. Spot and Basis - On June 5, 2025, the spot prices of various specifications of logs in different ports remained unchanged compared to the previous day and five days ago. The basis (after conversion) was calculated according to the formula: basis (after conversion)=spot price with 108% over - length - main contract futures price ± premium/discount (subtract premium or add discount) [5][8]. Log Data Overview - Supply: The radiation pine import volume in April 2025 was 1.65 million cubic meters, a decrease of 60,000 cubic meters from the previous month and a year - on - year decrease of 10.3% [9]. - Inventory: As of May 30, 2025, the national port inventory was 3.41 million cubic meters, a decrease of 20,000 cubic meters from the previous week and a year - on - year increase of 2.1%. The port inventory in Shandong was 1,895,000 cubic meters, a decrease of 25,000 cubic meters from the previous week and a year - on - year decrease of 4.5%. The port inventory in Jiangsu was 1,135,153 cubic meters, an increase of 35,553 cubic meters from the previous week and a year - on - year increase of 35.3% [9]. - Demand: As of May 30, 2025, the average daily outbound volume of logs at ports was 628,000 cubic meters, an increase of 7,000 cubic meters from the previous week and a year - on - year decrease of 9.9%. The average daily outbound volume in Shandong was 331,000 cubic meters, an increase of 11,000 cubic meters from the previous week and a year - on - year decrease of 1.8%. The average daily outbound volume in Jiangsu was 229,000 cubic meters, a decrease of 7,000 cubic meters from the previous week and a year - on - year decrease of 12.3% [9]. - Profit: As of June 6, 2025, the radiation pine import profit was - 46 yuan per cubic meter, an increase of 1 yuan from the previous week, and the spruce import profit was - 108 yuan per cubic meter, also an increase of 1 yuan from the previous week [9]. Factors Affecting the Market - Positive Factors: Due to continuous import losses, traders have the intention to jointly support prices; macro - policies are exerting force; the overall sentiment of commodities has improved [7]. - Negative Factors: The demand is weaker than expected, and the sales are slow; the subsequent shipping volume has recovered [7].