Daily Report 200116 2016-01-26
Tuesday copper price dropped after soaring. From market side, crude oil price collapsed again which hammered the copper price. In addition, Tuesday IMF cut the forecast for global economy growth 0.2% to 3.4%, in 2015 was 3.1%, due to the growth from developing countries were generally slowly. The financial and crude oil market was in fluctuation at the beginning of the year. Though recently most markets were tended to balance, the VIX index was still at 26.5, higher than the average value 20. Release of the market panic surrounding still needs time. Back to copper market, LME spots premium increased $5.75 to $6.75, inventory increased 2575 tons. Shanghai spots copper discount was at RMB 310-150 but, middleman and downstream plants successively came into the market; the market stock up would gradually begin and bolster the market. On supply side, Rio Tinto fourth quarter copper mine output decreased 13% in 2015, annually was 504,000 tons which decreased 16%. The expectation on output in 2016 of this company was 575,000 to 625,000 tons.
Technically, LME copper price soared then dropped and, was likely to fluctuate in low point. We recommend waiting for the new long opportunity.
DCE soybean was strong in recent days, oil against meal ratio dropped over 2.3:1 and short term tendency was weakly downward. Northeast soybean was overall weakly out of stabilization, current commercial soybean mainstream purchase price in Heilongjiang area was among RMB 3660-3820/ton, oil soybean purchase price was in large span among RMB 3200-3400/ton, the average price was decreased from last week. We regard soybean No.1605 contract still focus at RMB 3640/ton temporally and, if price revives it may continuously rallying. Otherwise it will still in weakly fluctuation. We recommend staying in observing on operation.
Domestic soybean meal spots price stays in strong, intraday most areas edges up RMB 10-20. Current domestic soybean meal market, concentrated stock up momentum begins at terminal side and, all bolster the price. But sales are not as hot as expectation, partial traders still buy and sale in cautious, bear the market. Oil against meal ratio falls below the lower edge from recent interval, short term tendency is downward. We recommend arbitrage between oil and meal temporally in observing as for operation.   
Yesterday PP futures opened high and went higher, opened at 5800 and ended at 5948; trading volume increased 265,000 lots to 1.84 million lots; holding increased 38062 lots to 652,000 lots. On spots side, yesterday domestic PP market price slightly increased out of stabilization. Petrifaction producer price was mainly in stabilizing which bolster the market cost. Under boost from PP futures continued rallying, sentiment from merchants slightly improved, demand on continue shipping in surrendered part of profit weakened and, tested to quoted high for observing the market. Plants in downstream purchased appropriately and observed in cautious.
Mainstream quoted prices for wires of north, east and south markets are RMB 6100-6200/ton, RMB 6200-6400/ton and RMB 6300-6450/ton, respectively.
As for operation, current price broke though sixty days moving average; MACD red column extended as upward trend. If the price is stabilized above the moving average, there might be a revive trend recently.
                                                                                 Dong LV (Investment Certificate NO. TZ008452)