Daily Report 291215 2015-12-30
Copper
Monday LME market closed and, domestic copper market stabilized in the night session. On macro side, People's Bank of China issued fourth quarter meeting statement, indicated current domestic and economy operating was overall stable, hidden risk in global financial market was increased and, would continue implemented sound monetary policy, focused on moderately easy and tight policy. Prime Minister Li as well indicated intraday that need to take advantage of huge fiscal policy scope, properly use monetary policy instrument as reserve reduction, directional decrease reserve, interest reduction to keep economy stable operating; appropriately respond and defuse risks. Under the impact from gradually accurate monetary policy, we have reason to believe that economy will further reviving. On fundamental side, Shanghai copper spots were discount RMB 300 to discount RMB 90, trading mostly on import copper supply, momentum was plainly by the end of year. Technically, copper price might continue fluctuated in a short-term; if LME effectively rose over $4750, next target would be $4900; domestic copper resistance was still RMB 36350, RMB 38000.


Soybean
DCE soybean was further weakened after broke through prior volatile; oil against meal ratio weakened in last night. Recent domestic soybean was overall stabilized, northeast soybean started to weak after recent slightly rally, market shipment was slow; hammer on soybean out of province was huge. It is predicted short term spots price would operate in stabilizing, the upward scope was limited before the Spring Festival. We regarded soybean No. 1605 contract fluctuation was broken and, since spots were stabilizing, we recommended stayed in observing on operation.
Domestic soybean meal spots price reduced in most areas, market trading was slow but, oil plant tended to support price, buying momentum at downstream was in ordinary level. Current demand at selling market still tend to sluggish, stock up before holidays basically ended, spots price were predicted to continue weak out of fluctuation in a short term. Oil against meal ratio was 2.36:1. As for operation, fluctuation interval on oil against meal ratio narrowed, we recommended arbitrage between oil and meal paying attention on stop profit.


Natural Rubber
Yesterday domestic futures generally dropped, US dollar rubber spots reduced quotation: domestic spots price was 1100-1120 (-20); domestic cargo price 1130-1150 (-10); US dollar RSS spots price 1250-1260 (0); US dollar RSS cargo price 1240-1270 (-10). On news side: onshore RMB again set record low from four and half year after the sixth straight increase. Overnight Europe and US stock market, gold dropped and oil price dropped over 3%. Overall: under the influence from overseas Christmas momentum and domestic bearish stock index registration system, yesterday domestic futures market was weak after opening; bearish momentum started boosting in afternoon market; futures market followed stock market dropped in raised volume. Natural rubber No.1605 contract closed at 10335 point. We maintain the opinion on reviving in medium term and, recommend paying attention on right side protection on operation, paying attention on prior intensive trading interval technically.


PP
Yesterday PP futures opened flat and went lower, opened at 5868 and ended at 5736; trading volume increased 144,000 lots to 1.613 million lots; holding increased 7146 lots to 641,000 lots. On spots side, yesterday domestic PP market price was in consolidation. Practitioners’ mindset was influenced by dropped PP futures, but hammer on market supply inventory was not huge, merchants mainly shipped in stable price; partial merchants tried to quoted high for observing market reaction. Demand at downstream followed slowly, trading growth was weak.
Current main quoted prices for wires of north, east and south markets are RMB 6350-6450/ton, RMB 6400-6650/ton and RMB 6550-7150/ton, respectively.
As for operation, current moving average system was intertwined, MACD red column shortened and, approaching 6000 integer point as resisted reviving trend which lacked of momentum. Recent PP futures might come into weak out of fluctuation, we recommended staying in observing.


                                                                Dong LV (Investment Certificate NO. TZ008452)