Daily Report 260914 2014-09-26
The LME copper remains range bound around a low price, closing lower by $ 39.5 on Thursday. The U.S. stocks plunged on Thursday while the USD soared. The weekly U.S. initial claims for unemployment benefits increase by 293 thousands, lower than the expected figure 300 thousand. Employment in the U.S. is optimistic, but the expectation that the rate hike will be advanced still exists. Besides, investors are increasingly expecting easing policy on the Euro, which results in the appreciation of the USD and pressure to the copper market. In terms of China, investigation on recent Qingdao harbor issue comes to a conclusion. The Foreign Exchange Administration Official claims that entrepot trade documents which have been proved to be fake worth around $ 10 billion, including metals stored in Qingdao and Penglai harbor. It is estimated the foreign banks and traders are facing a loss as much as $ 1 billion. The risk exposure of domestic banks could be billions of dollars. This issue makes financing copper under resistance and puts pressure on the copper market. The LME copper spot premium is up by $ 2 to $ 40 while the inventory drops 500 tons to 155 thousand tons. Copper is rallying after the slump on Monday, but the dynamic is obviously insufficient. Considering China’s economy is still under directional adjustment, policies are not likely to change in a short term. The expectation of the U.S. rate hike is increasing. On the whole, the fundamental news is negative for copper. The demand of copper in China is not strong but the supply is rising significantly, which lead to a surplus situation of copper. Therefore, it is believed that the copper’s downward trend is highly likely to remain. The resistance levels of LME copper and domestic copper are $ 6750 and RMB 48000 respectively. As there will be a seven-day national holiday from next Wednesday, exchanges’ margin rates will be increased sharply. Related measures are recommended to be prepared in advance.
On Thursday, LME 3-month Aluminum edged down, closed at $1950.5/ton, and dropped 1.19%. This week the United States initial claims for unemployment increased 12000. The ECB president Mario Draghi stated again to loose monetary policy. The Euro zone, Ukraine and Russia are going to have negotiations towards gas supply. Domestically, the guidance on Yangtze River economic belt was issued. The ministry of industry is going to promote new energy vehicles. Central bank issued 14 days repurchase of RMB 18 billion yesterday. Industry, Rusal CEO suggested that till then end of this year global aluminum market is going to have a shortage of 1.5 million tons. It would adhere to run of mine ore export ban, said by energy minister of Indonesia. Pay attention to Shanghai aluminum within RMB 14000 to 14200.
                                                                                                                    Dong LV (Investment Certificate NO. TZ008452)