Daily Report 140316 2016-03-14
Macro Economy
The US and Europe stock market soared on Friday; US debt slumped; commodity market, non-ferrous market and crude oil rallied; ferrous metal and gold dropped. Investors revalued the stimulate measures from Europe and, welcomed policy on promote growth. S&P 500 index rallied for the fourth straight week which set an ended high point over this year; S&P 500 index rallied 32.54 point or 1.64% to 2022.11 point at last Friday market close. From news side, the US and Europe market at the weekend, majority data showed from China showed, January to February industrial added value increased 5.4% year-on-year was lower than expected 5.6%; social retail sales of consumer goods increased 10.2% year-on-year. January to February fixed asset investment increased 10.2% year-on-year; real estate development investment nominal increased 3.0% year-on-year; January to February actual use of foreign capital increased 2.7% year-on-year. In addition, central bank data showed social financing scale increased RMB 780.2 billion was far away from expected RMB 1.84 trillion; new yuan loans were RMB 726.6 billion, lower than expected RMB 1.2 trillion; M2 increased 13.3% year-on-year was as well lower than expected 13.7% growth. Overall, revive from fixed investment especially the real estate investment is completely in conformity with our estimation in January. From transmission route side, the year-on-year increased investment hasn’t affected the manufacturing industry and, caused industrial added value decreased. From financial data side, after the numerous credits in January, it is not unexpected on the sharply dropped February data; the January and February accumulated data from social financing scale and the new yuan loan under its size was still higher than last year and the year before last year. According to prior logic, the improved data might bolster the expectation on growth but, current mixed data might cause different trend on market, short term tendency might be strong out of fluctuation, medium term tendency need more bolsters from positive data, we keep the standpoint on inflection points would appear in March and, possibility on market continue strong in fluctuation under bolster was huge.

Last week copper market retraced but, got bolster at low point. Last week domestic copper inventory soared 45,000 tons but, market was still under bolster, LME was in the low level and last week inventory was only 176,000 tons; spots premium extended to $16.5, domestic and overseas inventory showed difference, competition on the pricing power in the future would bolster market in a short term. Fed meeting will be held in this week, possibility on not to hike interest is huge and, it is expected copper still got bolster in the first half week. Technically, copper price is in strong performance, expects to rally again in a short term; we recommend long in a short term or, wait for the short opportunity after revive.
DCE soybean market tendency is in divergence; soybean No.1 contract is weak and, pattern on strong oil and weak meal is plainly; oil against meal ratio set new high. Northeast soybean price continue stabilizing in most areas, market trading is thin, especially at the Heilongjiang area, current market mainstream purchase price is RMB 3600-3700/ton; market high quality and high price pattern is plainly. Partial grain point in Heilongjiang suspended receiving commercial soybean and, mainly in digesting inventory; since recent export sales were poor, grain merchants receiving and shipping all faced hammer.
On soybean meal side, spots were weak out of stabilization, oil plants at coastal quotation was RMB 2450-2520/ton; domestic oil plants operation rate was high, import soybean supply was sufficient and, big and other breeding market stock was low which was hard to drive purchase demand from breeding enterprise; soybean meal sales speed in most areas was still slow. Along with forward import soybean and soybean meal production cost continued downward trend, domestic soybean meal market still got downward scope. As for operation: we recommend cautiously operating soybean and, arbitrage between oil and meal staying in observation temporally.
Natural Rubber
Last week Shanghai rubber fluctuated in high point; US dollar spots market price dropped. Up to Friday: domestic spots price is 1200-1210 (-10); domestic cargo price 1210-1230 (-20); US dollar RSS spots price 1380-1420 (-20); RMB compounded rubber 9600-9700 (-100). From news side: last weekend released China February core financial data failed to meet expectation; M2 increased 13.3% year-on-year, growth was 0.7% lower than in last month and, was 0.8% higher than same period of last year; February new yuan loan and social financing scale was less than trillion yuan, was the halve of expected value and, month-on-month value sharply narrowed to nearly 70%. From rubber perspective: Qingdao bonded market trading brisk up, spots inventory continues decreasing. SHFE inventory increased 1189 tons to 281144 tons; including inventory futures increased 3950 tons to 233330 tons. Tire enterprise in downstream operation ratio goes high, plants purchasing momentum revives above 1200; Shandong area all-steel tire operation rate is 64.8%; domestic semi-steel tire operation rate is 69.62%. Overall, market volatile at high point, investor’s short term trading might mainly in observing.
                                                       Dong LV (Investment Certificate NO. TZ008452)