Daily Report 040216 2016-02-04
Wednesday copper price strongly revived. US January ISM non-manufacturing industry index is 53.5, not only far away from expects 55.1, but the increase speed set the lowest level since February 2014. In addition, currently Fed officials held cautious attitude to the rate hike procedure, several Fed officials indicate rate hike pace may slow down; though US January ADP employment exceeds expect with newly increases 205,000, the US dollar index still slumps with lowest level at 96.885 in yesterday; copper price strongly revived by taken this chance. Yesterday crude oil price soared and, most US stock market ended low, financial market volatile exacerbated the investors’ hedge sentiment and, gold was hyped.
Back to cooper side, LME spots premium decreased $2.5 to $3.5, inventory continued decreasing 3625tons. Shanghai copper spots discount narrowed RMB 55 to discount RMB 140-80; intraday market participation further decreased; quotation was limited; sources of supply shrank and, downstream left the market. We tend to regard copper price is in the rally trend of first quarter and, we recommend seeking for the good opportunity for long position.
DCE soybean tendency was volatile, trading pace before the Spring Festival started to slow down; oil against meal ratio was 2.308:1 and, short term tendency tend to hovering at 2.30:1. Domestic soybean market trading activity into countdown, since most market entities were gradually leaving the market nearing the Spring Festival, the remaining practitioners were in the final stock up in the observation which impacted the market. We tend to regard soybean No.1605 contract will mainly in weakly trend out of fluctuation before and after the Spring Festival.
Soybean meal spots quotation strongly operate out of stabilization, spots in most areas support the price; trading is thin and, feeding enterprises and merchants stock up is largely ends; February import soybean port arrival amount sharply decreases but, under the impact from operation stops in Spring Festival and stock up, spots are hard to have variation after the holidays. Quotation of oil plants at port is mostly at RMB 2600-2650. As for the positions before holidays, we recommend holding soybean in short or holding partial arbitrage between long oil and short meal.
Yesterday PP futures opened low and went high, opened at 6166 and ended at 6258; trading volume decreased 122,000 lots to 1.215 million lots; holding decreased 28716 lots to 612,000 lots. On spots side, yesterday domestic PP market tendency was overall in stabilizing. Partial petrifaction slightly reduced producer price which weakened the bolster to supply produce cost. Merchants were gradually into holidays, quotation decreased and the reference price was mainly in stabilizing; most downstream side was in the holiday, market trading activity gradually decreasing, trading and investing was thin.
Current main quoted prices for wires of north, east and south markets are RMB 6250-6350/ton, RMB 6350-6450/ton and RMB 6550-6750/ton, respectively.
As for operation, current moving average system arranged in long; MACD red column extended as bullish pattern. But along with Spring Festival is approaching, most spots merchants are in holidays, recent market is expected to be flat and mainly in continuing fluctuation.
                                              Dong LV (Investment Certificate NO. TZ008452)