Daily Report 091215 2015-12-09
Copper
After Tuesday domestic market closed, overseas market copper price dropped after rally and, price ended slightly increased. On macro side, US October JOLTS job vacancy exceeded expected 5.383 million pieces, the September value up revised from 5.526 pieces to 5.534 pieces; yesterday weakly revived US dollar lower the barrier to copper price rally trend. On fundamental side, LME spots premium increased $3.3 to $4.05, inventory continued decreasing 25. Shanghai copper spots were discount 50 to flat, decreased RMB 25 compare to yesterday. Enterprises in downstream stayed in observing, buying momentum was poor and trading volume was mostly on speculators. On supply side, mining giant Anglo American announced drastically restructuring plan, including offload assets, sharply cut costs and suspend dividends. Sell assets and shut down unprofitable businesses would sharply decrease the workforce from current 135,000 pieces to 50,000 pieces. The company declared plan to shed 53,000 jobs in July. Rio Tinto as well would reduce its 2016 capital expenditure estimation from $6 billion to $5 billion for balancing investor returns and investment projects. Yesterday Glencore shares once slumped 9.4% in London. All signs revealed, survival environment from mine enterprises were rough under the harsh winter from copper price and, this injected some momentum to copper price rally trend.
Technically, if LME copper price rallied above 4670, next target would at $5000. If domestic copper price rallied above 35400, next target would at RMB 38000. We recommend still bid in low as for operation.
 
 
Soybean
DCE soybean continued weakened out of fluctuation in the night session; oil against meal ratio was strong out of fluctuation. Domestic soybean would usher grain sales peak season before the Spring Festival, price was still under hammer but, current most soybean farmers were in losses bolstered the market; under the condition of long-short coexist, the stabilizing market would continue for a while. Soybean No.1605 contract still focus on the long-short divide at RMB 3800/ton.
Soybean meal spots edged down in most areas; though domestic demand slightly recovered, soybean spots in most regions were sufficient, oversupply still exist and certain hammered the spots market. Oil against meal ratio was 2.43:1, short-term tendency was in upward. As for operation, continues holding arbitrage between long oil and short meal; pays attention if soybean oil and palm oil spread narrows.
 
 
Thermal Coal
Yesterday Qinhuangdao port inventory was 5.01 million tons; unloaded 6707 vehicles; anchored 70 ships and predicted was 8 ships. Port inventory edged down, anchorage and prediction ship amounts slightly dropped. Caofeidian port inventory was 1.84 million tons, the port inventory continued downward trend. Coastal six major power plants inventory was 11.774 million tons; power plants daily coal consumption was 567,000 tons, power plants inventory available for 20.77 days; six major power plants inventory remain in downward trend. From industry perspective, on 4 December, Xi’an railway administration officially announced notice on “in regard to adjust partial freight rate of Baotou-Xi’an railway”. The notice indicated that according to the rule from China Railway Corp “notice in regard to freight rate from Baotou-Xi’an railway and other railways”, after research from railway administration and, agreed with Shanxi Xi’an-Yan’an Railway Station, Xi’an-Pingliang Railway Station, since 6 December, 2015 to the time of another notice announced, carload shipped coal ( except C80 shipment and the coal transported within the line) of Baotou-Xi’an railway (newly extend to Zhangqiao part), Shenmu-Daliu railway, Xi’an-Pingliang railway (from Changqing bridge to Maoling part), freight arrival rate executed by RMB 0.184/ton kilometer; other transport freight rate remain the same.
Yesterday main contract edged up, price closed at RMB 289/ton, decreased 0.6 point or 0.21% compare to the last trading day. As for operation, we predicted main contract would still in volatile adjusting recently. 
 

PP
Yesterday PP futures down the limit; opened at 5584 and ended at 5400; trading volume increased 185,000 lots to 1.487 million lots; holding increased 40794 lots and 514,000 lots. On spots side, yesterday domestic PP market weakly dropped around RMB 100/ton. Slumped oil price dragged futures opened low and went lower, market bearish momentum exacerbated; Petro China north china, south china, northeast and northwest reduced producer price, weakened the bolster to supply costs. Merchants shipped for volume following the tendency. Orders from downstream plants were insufficient, firm offer receiving continued purchasing based on demands; overall market trading was poor.
Current main quoted prices for wires of north, east and south markets are RMB 6250-6400/ton, RMB 6400-6700/ton and RMB 6600-6900/ton, respectively.
As for operation, current moving average system bearish pattern continues; MACD red column shortens, bearish pattern continues. Recent crude oil tends to weak and, no improvements on macro economy, possibility on continue weakening is high. Prior short positions can continue holding on operation.

 
                                                                        Dong LV (Investment Certificate NO. TZ008452)