Daily Report 270715 2015-07-27
Last week expectation of US interest rate raises sweeps over the whole market, foreign exchanges in Asia and Latin America slump; reflects U.S. rate raising causes asset backflow again, as well causes concern on developing country especially China economy, Friday the State Council of China indicates will extend fluctuation range of RMB exchange rate, which shows the huge pressure on financial market. Recalls the trigger of Asian crisis in 1997 is U.S. the rate raising, and this enhances concern of financial storm coming again.
Back to copper market, global copper inventories edge up recently and it seems to be normal in slack season; which should concern on is current domestic copper inventory is in a low level and, decreases about 7000 tons again in last week to 100,000 tons. Meanwhile, domestic spot premiums to the highest level within this year, in Friday is RMB 350-410, plus the import window continuously opening, domestic supply tends to tighten is plainly; but current market focuses on the macro risks, fundamental side is in the second role. The latest news, strike of Codelco has became violent accident and one worker died. Current the 70,000 tons capacity Salvador stopped operation. Technically, copper price will fluctuate in recent low point and only raises over $5300 may get rid of downward trend. Domestic October copper resistance is RMB 38500. We recommend avoiding macro risk as for operation.
Last Friday soybean narrowly volatile in night session, under the influence of overseas market falling, intraday price will open low and go low; soybean No.1 contract varies in fundamental, northeast soybean price slightly rallies in the middle of last week, mainly because high quality soybean appears a certain rally trend which releases the downturn market atmosphere; but reviving of downstream shipping is slow, inventories in merchants and enterprises are higher than last year, will limit the rally scope of spots price.
Soybean meal spots maintain stabilize in most areas last week; along with U.S. soybeans falling again, soybean meal spots will end the firm status under the impact and, market estimates soybean arrival amount in August to September still is huge, hammer on market is hard to eliminate; soybean meal will back to retracement follows with overseas market. As for operation, we recommend hold slight short positions in short term.
PP futures continue dropping last week. In upstream, up to Thursday night, FOB Korea propylene average price is $845.5/ton. As for device side, operation rate is about 81% currently and little higher than last week. In spots side, international crude oil price drop and hit the market mindset, domestic pp market price fall in last week. Phenomenon as shipping price is high than retail price, profit surrenders in firm off is frequently.
For instance of wires, main quoted prices of north, east and south markets are RMB 8000-8100/ton, RMB 8100-8350/ton and RMB 8250-8400/ton, respectively.
As for operation, current price falls through prior upward trend line bolster, moving average system permutes in short, MACD exposure extends down as a downward trend. We recommend continue shorten when hit high point as for operation.
                                                                            Dong LV (Investment Certificate NO. TZ008452)