Daily Report 140115 2015-01-14

During the night trading session, AU1506 contract finish lower after making a new high point and meet the 250 stress line. For trading operation, long orders made by 247 should stop at 249 for half of the holdings. Focus on the 251 stress line; Be aware of the daily decline risk, and defend at 248. Number of US November JOLTS job vacant is at 14-year high, high automatic turnover for employers means the confidence for the job market which support US Dollar Index. In addition, Euro Central Bank raise high exception for stimulus plan on 22th which leads continuous decline for Euro against dollar. The risk for Greek exist Euro system is high, capital favors more on risk-averse assets. Yield for US 10 Year Treasury Bond decline to 1.89%, Gold continuous to rebound. Overall, tension for Greek voting support the gold price, but Fed’s decision for middle interest addition will force the price of gold to find new bottom.


AG1506 Contract slight move up and left energy compare to gold. For trading operation, investors should reduce holdings at 3650 when price break the 3600 stress line, the focus will 3700 stress line. Overall, price of sliver follow tightly of price of gold, but it has metal characteristics compare to gold. For capital perspective, Sliver ETF holdings reduce holdings at high price since Dec 2014 which means investors still have negative outlook for sliver even the price rebound.

Stock Index

Stock Index continues fluctuating with shrinking in volume with heavyweight stocks poor performance. The focus switch to small-cap stocks temporarily. There will be 22 subscriptions of new shares which put capital under pressure. With early huge amount gain for heavyweight stocks, market needs some adjustment opportunity recently. For mid and long term, exception for risk free rate continuous to decrease, IF Index could get support, but the rebound space is limited. Short-term volatility is inevitable, but the central gravity decline compare to last week.


LME Copper price fell sharply on Tuesday, LME Copper break $6000 support and close at day’s low $5774, down by 257 or 4.3%. Domestic three-month contract declines to 42500. With global weak economy growth, relatively strong dollar and recent crude oil price downward which suppress price of copper. The inventory of Copper recently causes the market to aware of the excess copper supply. The World Bank lowered forecast for global growth for this year and next on Tuesday and raise exception global growth for this year is 3%, much lower than the June’s 3.4%. In addition, it also lowers the global GDP increase percentage from 3.5% to 3.3%. Euro-Zone, Japan and most emerging market outlook miss exception which market to worry about insufficient demand during a moderate economic growth. LME backwardation fell $7 to $77, inventories raise 3925 tons to 191,300 tons. European and Asian inventories continuously increased, indicating weak demand in the two locations. Domestic cash discount slightly decline 20 to 180-80. Domestic Copper price decrease cause the discount narrowed, reducing downstream purchase volume, decline in turnover. This week, import for profits turns to loss, Import operation loss 116 on Tuesday. Technological analysis shows that both domestic and oversea copper markets are weak, LME copper has its possibility decline to $5500. Trading operation suggest that investors could wait for price stop to decline. Domestic 3 month copper stress line is 42900.


LME 3 month aluminum finish lower at $1785 Dollar/ton, down by 1.6%. The World Bank lower the global economic growth exception. ECB is expected to purchase debt bond. European and American stocks went separately. Customs announced December trade data which exports expand more than expected. Industrial analysis shows that Ministry of Environmental Protection revised <Environmental Law> recently with four supplements. Shandong Environmental Protection Agency released a list of excessive emissions which included 70 corporations and conduct daily penalty. China Aluminum Shandong Branch Power Plant also receive penalty. Alcoa announces that global aluminum consumption will increase 7% in 2015 and aluminum supply gap will narrowed to 3.8 million tons in 2015 as China’s additional new production capacity. Trading operation will be continuous to purchase Shanghai Aluminum future contract.


Soybeans continue decreasing during the US night trading session because of the month demand and supply report and fund liquidation. USDA 1 month crop report surprised the market,
bringing a new short-term negative impact on the market. Compare with the bullish contrary, USDA reconfirmed the fact of increase in supply for global and US and contain a positive outlook for South America soybeans harvest. NOPA report shows due to the high yield rate for US soybeans production, the crush volume for December will be a new record, also bringing a stress to the market. Short-term US soybeans will test 1000 stress line. Dalian Soybean contracts decline follow by the oversea market. According to the impact of domestic weak physical market, A1505, 1509 contracts faces physical delivery stress. Price for physical soybean meal also decline follow by the future price. Prices for physical soybean meal at Guangdong and Guangxi close to RMB 3000/ton. There will be a huge amount of import soybeans arrive at port by January. All the factors bring to a weak market. For trading operation, investors are recommended to hold short positions. Be cautious of short under 2800, Short Dalian A contract after rebound.


Yesterday, PP contract open at 7140 close at 7188, trading volume increase 131,000 to 767,000. Holdings decrease 15116 to 360,000. For upstream, crude oil continuous to fall, WTI crude oil decrease 18 cents at $45.89/barrel. Brent crude oil decline 84 cents at $46.59/barrel. Propylene price is flat. There is no sign of limited production or repair. Fir spot market, most markets for PP price continuous to decline, but narrow the decline percentage. Quoted price for China Petroleum Southern, Northern continuous to fall which leads to a weaker market. PP contract fluctuated with high volatility, most industrial personnel wait for further notice, factories unleash inventories. Downstream, the initiative for factories purchase is general and quite. Currently, Northern market drawing price is around 7800-8050/ton. Eastern drawing is quoted at 8100-8650/ton. Southern drawing price is around 8300-8750/ton. The fundamentals remain week for PP. Price for PP contract stays around 7000 round. It is likely to maintain its current market.
                                                                                  Dong LV (Investment Certificate NO. TZ008452)