Daily Report 270416 2016-04-27
Tuesday domestic and overseas copper market trading and investing are thin. Copper price fluctuated narrowly. Dropped US dollar and increased crude oil price bolstered copper price. The Fed holds monetary conference on Tuesday and Wednesday, and interest rate expects to be stable. Statement released after meeting should be very important, market expects to see the hints of June interest hike. Tuesday LME spots discount slightly increased $3 to $11.5; storage increased 75 tons. From supply side, FREEPORT cut 2016 sales plan for 50000 tons to 2.314 million tons; increased 24% compared with 2015. FREEPORT claimed to reduce half of its forward contract volume in 2017. TECK first-quarter output was 82000 tons, which was 81000 tons same period last year. From first-quarter report released recently, most output reduction plans released end of last year were under implement. But main newly increased capacity has already released as scheduled, and will focus on second and third quarter. Overall, copper supply will continue with positive growth. Considering consumption season will end, we still recommend copper price will drop again after recent fluctuation. As for operation, we recommend to find opportunity to short.

Domestically, the motion of DCE soybean price rebound is insufficient, oil against meal ratio is 2.41:1. Northeast China soybean spot price is stable and relatively strong. Basic high quality raw grain price increased to near RMB 3600/ton; high quality soybean supply was intense. With the boost of port closure and basic level surplus grain reduction, short term tendency is still strong. From soybean meal side, spots price rose RMB20-40. Nowadays soybean meal price followed the tendency of US soybean; port oil plant quotation was around RMB 2500-2650/ton. April and May shipment delay might relieve oil plant supply pressure, so late market should not be largely short. As for operation: reduce soybean meal long holdings and, arbitrage between oil and meal operates at 2.4-2.65:1.

Nature Rubber
Yesterday Shanghai rubber fluctuated at the high point, up to spots trading period: domestic spots price is1530-1540(0); domestic cargo price is 1530-1550(-10); US RSS spots price is1710-1730(0); US RSS cargo price is1750-1770(+10); mixed rubber price is 11700-11800 (0).
From news side, according to qinrex, Qingdao bonded zone most warehouse outbound are small orders, concentrated on 200-400 tons. On the contrary, inbound are mainly big order, and concentrated on few warehouses. Overall, last week Qingdao bonded cone rubber storage didn’t change much. In terms of macro economy, the PBoC has carried out reverse repo operations of 7 Days amounting to 140 billion RMB on Tuesday, the reserve reporate is price to yield 2.25%. Additionally, 90 billion RMB of reverse repo becomes due on the same day. It is indicated within industry PBoC injects funds using reverse repo as well as MLFwill only ease worries about a short-term liquidity squeeze. Overall, Three Futures Exchanges adjusted trading commission fee and margin of multi contracts in succession, and noticed risk control; market enthusiasm dropped after market short and long momentum both decreased; tendency was estimated turned to strong volatile from unilateral upward trend. Concentrate on the 28 April the Fed interest rate policy.

Yesterday PP futures opened high and rose, opened at 6945 and ended at 7092, trading volume was 1.756 million lots and holding volume was 613,000 lots. From spots side, yesterday domestic PP market slightly increased. Part of producer price of petrochemical increased, and bolster for the market costs strengthened. PP futures increased continuously, boosted market’s confidence. Traders quoted with a slightly higher price to observe market’s reflection. Enterprises in downstream mainly purchase as demand, market trading was better than before. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6850-6950/ton, RMB 6900-7100/ton and RMB7000-7200/ton, respectively. As for operation, current moving average system changes to upward; MACD forms golden cross, which is rebound tendency. Recently bulk commodity rose systematically, whether upward tendency will continue still need observation; we recommend notice risk and keep observation.

                                                                         Dong LV (Investment Certificate NO. TZ008452)