Daily Report 090315 2015-03-09
Main contract of domestic gold AU 1506 dropped 2.81% in the night session on Friday. The gold decreased further after breaking down RMB 244. The US non-farm payrolls in February rose 295,000, which is much better that expected. The unemployment rate dropped to a record low to 5.5%, indicating the US job market is rallying strongly. The market’s expectation is strengthened toward the rate hike in June. The US dollar index hit its record high in 11 years while the gold in international market plunged increasingly after dropping below﹩1200. During the intraday trading, the decrease was found as high as ﹩30. The overnight gold ETF positions shrank for 3 straight times for 14.93 tons last week. However, influenced by the positive non-farm payrolls data, the overnight gold ETF decreased 4.48 tons to 756.32 tons last Saturday, which indicates the funds are not holding an optimistic view of the gold afterwards. In terms of operations, previous short positions opened at RMB 254.5 could be held. Part of short positions opened when the gold is weak at RMB 244 is recommended to be closed.

Main contract of domestic silver AG 1506 dropped following the trend of gold in the night session last Friday, however, the decrease of silver was higher than that of gold at 2.15%. The silver is expected to remain a downward trend afterwards. Previous short positions opened at RMB 3800 could be held. Short positions opened at RMB 3560 last week is recommended to be closed while defensive moves should be prepared at RMB 3490. The silver is likely to rebound during the intraday trading, but the increase is expected to be limited.
Last week both domestic and foreign markets copper price was adjusting, on Friday there was an increased drop. From the foundation aspect, recently domestic copper inventory continuously increased which stressed the market; last week 3 main copper trading exchanges increased 48000 tons, among them Chinese market increased 19000 tons; LME increased 27000 tons; COEX increased 2500 tons.
In February China’s copper imports fell 31.7% year on year, to 280000 tons; the first two months of imports is 695000 tons, down by 23% year on year; this highlights the weakness of domestic economy in early this year. Technically, recent copper callback rate has opened, LME callback target expands to $5600. Domestic copper price is RMB 41000 in May; investors should not rush to trade, wait and see further information.
In domestic market, soybean corrected following the trend of soybean in the international market last week. The spot price of soybean meal dropped accordingly. Quote prices in many areas decreased to the region between RMB 3050 / ton and RMB 3100 / ton. The price dropped as the speculation of South America’s theme is over, indicating the vulnerability of the rebound this time. The NO.1 soybean kept a downward trend while investors are still holding strong pessimistic sentiment. The A 1505 plunged RMB 4300 / ton and 4200 / ton respectively. Spot price of soybean is relatively stable after the Chinese Spring Festival, remaining above RMB 4100 / ton in many regions. Theoretically, the market price is underestimated. In terms of operations, soybean meals turn to be weak in short term. Short positions could be opened under this circumstance. As for No.1 soybean, investors are recommended to waiting for opportunities afterwards.   
Last week PP futures are in week situation, and even have the trend to go down further. In terms of upstream, FOB Korean propylene continues increasing, current average price is $1025.5 per ton. For inventory, after four straight week’s inventory accumulation, current domestic market inventory level is 116.86% than last year.
Like wire drawing, today's mainstream of north China bid in RMB 8300-8700 per ton, east China mainstream quotation in RMB 8500-8700 per ton, south China mainstream quotation in RMB 8700-8800 per ton.
Dong LV (Investment Certificate NO. TZ008452)