Daily Report 200815 2015-08-20
Stock Index
Intraday stock index rallied after falling, bottom fishing strength was strong in low point; level one sectors all raised and, only state-owned enterprise reform from concept sector edged down.  After partial enterprises published held from CSF, market enthusiasm to policy was back. But CSF would not enter the market soon after just exiting; market enthusiasm to CSF combined with state-owned enterprise reform, would maximum hit to prior pressure level, hence it was hard to rally back by this concept. The biggest story now is state-owned enterprise reform not accepted by market; in short term effect; economy data weakens, upward momentum is weak and hard to persistence. Other concepts, big data and sports are hard to bring plainly upward logic and, it is likely to happen assets will shift among each short term hot concept sectors without mainstream estimation and concept; index will mainly fluctuates.

 
Copper
Wednesday domestic copper fluctuated narrowly; intraday European and American stock markets plunged. Though Fed FOMC meeting minutes was biased toward dovish and, estimation of September interest rate raise decreased from 50% to 30%, market was focusing on global economy and deflation. Wednesday US CPI only increased 0.1%, concern on global economy was still the mainstream currently. Wednesday executive meeting of the State Council deployed developing modern circulation industry, which promotes developing on big data and further reducing taxes from small and micro businesses; China economy required further bolster from policy.
On fundamental side, LME spots turn into premium $1.5; inventories further increasing 600 tons; domestic spots are flat to premium RMB 40. As data reveals, July Copper pipe enterprise operation rate is 78.35%, drops 3.13% compares to last month and, decrease range narrows with increasing 0.8% on year to year base. July copper pipe enterprise raw material inventory ratio is 14.62%, slightly increase compares to last month. In addition, WBMS data reveals, global copper consumption decreases 1.2% in the first half year of 2015; global copper supply excesses 151,000 tons.
Technically, copper price is still in weak trend; LME resistance is $5100; domestic November copper resistance downs to RMB 39000. We recommend avoiding macro risk on operation.
 

Soybean
DCE soybean performance was weak in night session and dragged from sluggish US market. Soybean No.1 contract was still in strong independent of soybean market; most spots in northeast was stabilized; partial regions edged down RMB 40-60/ton. Under the impact from stale grain appeared in turn, import soybean flowed into market and lacked of demand, spots market was weak out of stabilize. But down range was limited in short term and, market momentum was strong.
Soybean meal spots fell in most areas and dragged from sluggish overseas market. Market presented tightening north inventory and, larger inventory in south china and east china; oil plants in north were in strong price supporting and volume was good, most plants were executing prior contracts. Pig breeding stock started increasing but, under the consumer demand before National holiday, it was hard to from persistence rally in breeding stock; meals were likely to continue volatile weaken. We recommend to observing or in shorten as for operation.
 
 
PP
Yesterday PP futures fluctuated in low; opened at 7660 and ended at 7701; trading volume increased 74,852 lots to 598,000 lots; holding decreased 1548 lots to 222,000 lots. In upstream, FOB Korea propylene decreased $9, average price was $812.5/ton. On spots side, yesterday domestic PP market slightly loosened, partial merchants surrendered profits around RMB 50/ton in real market. Though crude oil rallied after falling, futures opened up high and went higher, the stuffed volume exacerbated shorten momentum; merchants sought for volume in slightly profit surrendered. Under bolster from most petrifaction stable price, merchants profit surrender was limited. Downstream plants stay in observing on real market purchasing and volume was limited.
For instance of wires, main quoted prices of north, east and south markets are RMB 7900-8150/ton, RMB 8200-8350/ton and RMB 8250-8400/ton, respectively.
On operation side, current moving average system turns in to downward; MACD red column shortens as weak trend; it is possibly continue weaken volatile in the near future. We recommend continues holding short positions.
 
 
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