Daily Report 080116 2016-01-08
Thursday copper market was weak, LME got bolster after dropped to prior low point 4443; domestic copper price once dropped 2.5% and then regained most losses. Thursday nonferrous metals market showed hammer which had a lot to do with the volatility at the beginning of this year.  By the reason, firstly, circuit breaker was triggered on Chinese stock market on Thursday and market was closed earlier which spiral upwards investors’ panic sentiment; the accelerated RMB devaluation as well increased the concern on Chinese economy. Secondly, crude oil market continued collapsing; the intensified situation in the Middle East as well increased the market risk. Current global market was accumulated with risk which was the major reason on market risk aversion. Thursday oil price got bolster after collapsed, US dollar exchange rate dropped because of the expectation on recent situation would impact the process on US interest rate hike; Thursday China announced to suspend the A-Share index circuit break mechanism, we need to see the revive from Chinese stock market and, the relief from the tensioned global financial market. Back to copper side, there was two small mines announced to stop production recently, with about 20,000 tons output. Technically, we recommend paying attention on the performance of LME prior low point $4440; there is exists bolster at domestic side. Wait for the entering opportunity after financial market revived.

DCE soybean was in strong tendency, oil against meal ratio further dropped. The other day domestic soybean export price in Midwest, East and North region of Heilongjiang province dropped RMB 20-40/ton, though the downward trend has become a mainstream, the weakly market supply and demand had plainly showed. We regard direction on soybean No. 1605 contract was uncertain in short term, the entire tendency before Spring Festival would mainly in weakly fluctuation. We recommend stay in observing on operation.
Intraday domestic soybean meal spots rallied out of stabilization, increased RMB 20-50/ton. Feeding enterprises stocked up before Spring Festival might made oil plants supported the price; soybean meal reviving trend hasn’t finished yet, short term retracement was limited. Oil against meal ratio was 2.36:1, short term tendency tended to downward. As for operation, we recommend holding light arbitrage between long meal and short oil.
Yesterday PP futures opened low and went lower, opened at 5701 and ended at 5627; trading volume increased 64044 lots and 1.843 million lots; holding decreased 51948 lots to 579,000 lots. On spots side, yesterday domestic PP market price edged down RMB 50-100/ton, market sources of supply was ordinary. Most petrifaction regions reduced producer price which weakened bolster on market costs. Heavily bearish news had certain shattered the spots market. Merchants’ sentiment was poor and actively shipped in surrendered part profits to promote trading, with some hung upside downs. Downstream plants initiatively receiving demand was weak, most in observing sentiment.
Current main quoted prices for wires of north, east and south markets are RMB 6150-6350/ton, RMB 6250-6650/ton and RMB 6600-7100/ton, respectively.
As for operation, current moving average system twists, MACD is forming the dead cross as weak trend. It is predicted that price will continue weakening recently.
                                                                 Dong LV (Investment Certificate NO. TZ008452)