Daily Report 110315 2015-03-11
Macro Economy

In domestic market, data released from the National Bureau of Statistics yesterday shows that the CPI of February is up by 1.4% on year-on-year basis and up by 1.2% compared with that of January. This figure has been below 2% for the past 6 months. Besides, the PPI decreased by 4.8% on year-on-year basis and by 0.7% compared with that in January. The PPI has been dropping for 36 straight months. Due to the fluctuation of food prices during the Chinese Spring Festival, data rallies in this term. It is believed that this rebound will not last long as the pressure of deflation still exists. Attention should be paid on figures on industrial production, fixed-asset investment and total retail sales, which will be released today.


In domestic market, spot price of copper remains in a low level. The trading volume of spot copper rebounds slightly, however, consumers have not yet shown a strong willing to purchase copper. On the whole, the US dollar exchange rate is the biggest pressure to the copper market. Investors are still expecting future domestic consuming and policies afterwards. In terms of technical analysis, the copper price is correcting recently. The effectiveness of bolster price should be focused. Copper price in LME is around ﹩5,700 while domestic copper price is RMB 41700. As for operations, previous long positions could be held, waiting for opportunities afterwards.


In domestic market, soybean meal and soybean oil performs relatively weak while the No.1 soybean rebounded in the night session. As the soybean spot price seems to be stable, the market turned to be oversell. The soybean meal spot price continued dropping. Quotation in coastal areas declined to the range between RMB 2980 / ton to RMB 3030 / ton. Domestic consuming has been relatively flat. Operating rate of oil factory rallies, so as the market supply of soybean oil. In terms of operations, investors may open short positions when the soybean meal price is high. As for No.1 soybean, further moves are not recommended to be taken due to its small trading volume and frequent fluctuations.


Yesterday PP futures opened in flat and followed with fluctuation. It opened at RMB 8112 and closed at RMB 8077. The trading volume 477000 lots and the holdings are 244000 lots. In terms of upstream, FOB Korean propylene fell by $10 to average price $1015.5. For devices, the operation rate is lower than last week.
In spots market, yesterday among most domestic markets the price dropped slightly. Though PP futures opened high, it has limited effect on boosting investors’ confidence toward the market; there is a thin market in both trading and investing. Like wire drawing, today's mainstream of north China bid in RMB 8180-8400 per ton, east China mainstream quotation in RMB 8250-8500 per ton, south China mainstream quotation in RMB 8250-8550 per ton.
From the quotation, current price broke out 20-day moving average; and the price fluctuation is narrowed. We think in the near future price is more likely to continue the weak shock.
                                                                                 Dong LV (Investment Certificate NO. TZ008452)