Daily Report 250216 2016-02-25
Copper
Wednesday copper market rallied after downward and, closed slightly increased. Yesterday Europe and US stock market performance was mixed, Europe stock was generally in poor appearance and US stock ended increased; international oil price was still fluctuated since the negotiation on supply problems hadn’t reached an agreement yet, global finance market was hard to say in stabilization. Under this circumstance, IMF urged the G20 countries hand in hand to raise government expenditure for resolving the risk on global economy accelerated downturn and, indicated recent market fluctuation and developed country weakly output might force IMF further reducing global growth expectation. On copper side, LME spots premium increased $2.25 to $5, inventory continued decreased 1250 tons. Domestic spots discount narrowed RMB 10 at discount RMB 230 – 150; buying volume in the downstream was plainly insufficient, between the actual trading and expectation existed a large gap; a few trading was limited between the merchants since discount hadn’t extended which limited the trading momentum. Overall, copper market was in the fluctuation and we recommend waiting for a clarified market.
 
 
Soybean
DCE soybean slightly weakened in the night session and, domestic market supply and demand side was relatively quite; oil against meal ratio was hovering at 2.41. Northeast soybean price was weak out of fluctuation, Heilongjiang area purchase price was at RMB 3700/ton, soybean filtered by tower export price was at RMB 3800/ton, and current market high quality and high price pattern was plainly. Since the surplus grain in the northeast area is at 40%, there will be issues on hard to reserve and concentrated marketing lately, hence the short term tendency on soybean No.1 contract was not optimistic.
On soybean meal side, soybean meal spots quotation was decreased in most areas; spots and basis trading was thin under the influence of dropped US market; pigs and other feeding market entered the seasonal demand slack season; feeding enterprises purchase demand was not strong after holidays; domestic soybean meal market was lacked of boosting from demand, price was hard to rally. As for operation, soybean No.1 contract takes reference on interval between 3400-3600; arbitrage between oil and meal can consider stop profit at 2.4:1.

 
PP
Yesterday PP futures continued fluctuated; opened at 6380 and ended at 6442; trading volume increased 396,000 lots to 1.834 million lots; holding increased 16580 lots to 635,000 lots. On spots side, yesterday domestic PP market dropped out of fluctuation, price went down RMB 50/ton. Petro China north china, east china, south china; Sinopec south china and partial petrifaction producer price reduced, bolster to supply weakened and, merchants shipped in the tendency for trading; partial merchants hold lots goods increased profit surrendered range. Plants in downstream were in observation, real market cautiously purchase based on the orders; digestion on the supply of goods slowly procedure; market trading and investing was thin.
Current main quoted prices for wires of north, east and south markets are RMB 6200-6350/ton, RMB 6300-6450/ton and RMB 6450-6600/ton, respectively.
As for operation, current moving average system arranged in long; MACD twisted, the upward trend was blocked; we predicted recent tendency would continue strongly fluctuated.
 
 
                                     Dong LV (Investment Certificate NO. TZ008452)