Daily Report 260216 2016-02-26
Thursday copper market dropped in the fluctuation and, closed down 1.25%. From leading factors, domestic stock market was slumped again in yesterday; Shanghai composite index closed slumped 6.41%; the turbulent domestic stock market had increased the concern from market to top copper-demand nation, copper price was tumbled under the hammer; it's worth noting that effect from output reduction had formed a certain bolster to copper price. On copper side, LME spots premium increased $3.25 to $8.25; inventory continued decreased 3200 tons. Domestic spots discount narrowed RMB 5 at discount RMB 230 to RMB 140, overall market trading was concentrated between the merchants; market supply was sufficient; a plainly buying momentum still didn’t shown in the downstream, the market expectation still existed. From supply side, sunken pipe from the Andina copper mine of Codelco leaked and, the production and operation has already halted, the annual output of this mine in 2014 was 232,000 tons. Overall, copper market is still in the fluctuation, we recommend waiting for a clarified market.
DCE soybean was in fluctuation tendency, domestic market supply and demand side was relatively flat; oil against meal ratio was hovering at 2.41. Tendency in the northeast area was still in downward; Heilongjiang area purchase price was at about RMB 3700/ton. Export price of the soybean after filtered by tower was at RMB 3800/ton; current market high quality and high price pattern was particularly prominent. Since the surplus grain ratio in the northeast producing area is at 40%, there will be problems on hard to reserve and concentrated marketing, hence soybean No.1 contract short term tendency is not optimistic.
From soybean meal side, soybean meal spots quotation overall edged down; spots and basis trading was still thin. Domestic soybean meal working modulus gradually back to normal level after the Spring Festival; domestic soybean import supply was sufficient and, the breeding stock from pigs and other feeding market was low which was unable to boost the feed enterprises’ purchase demand after holidays. As for operation: we recommend soybean No.1 contract taking reference at 3400-3600, arbitrage between oil and meal considering stop profit at 2.4:1.
Yesterday PP futures opened high and went higher in the fluctuation; opened at 6469 and ended at 6544; trading volume increased 42592 lots to 1.876 million lots; holding decreased 18818 lots to 616,000 lots. On spots side, yesterday domestic PP market showed slightly upward trend out of stabilization. Producer price from most petrochemical enterprises is mainly in stabilization which forms certain bolster to market costs. PP futures operating at high level, results certain boosts on market sentiment. Merchants are mainly shipping follows the tendency and, observe the market reaction. Partial merchants take advantage of the opportunity to quote high, actual market is mainly in negotiation. Plants in downstream observe in cautious, initiative receive demand is low, market trading and investing is thin.
Current main quoted prices for wires of north, east and south markets are RMB 6250-6350/ton, RMB 6300-6500/ton and RMB 6450-6600/ton, respectively.
As for operation, current moving average price still arranges in long; MACD red column extends as upward tendency and, is expected to continue strongly fluctuates.
                                                                    Dong LV (Investment Certificate NO. TZ008452)