Daily Report 050516 2016-05-05
Thursday copper market continued dropping under thin trading momentum, and recent dollar currency exchange influenced a lot to market. Thursday dollar index continued slightly increasing; US personal employment data was worse than expected. Listed enterprise achievement is not optimistic. Risk index has increased, and stronger US dollar might for the purpose of avoiding risk. This might expose the negative effect of easing policy. This atmosphere is still benefit to decrease copper price. From fundamental side, LME spots premium increased $4 to $12.5; inventory increased 1825tons. Domestic spots discount narrowed, and it was expected that spots discount would turn to premium. With dropping price and nearing last trading date, this phenomenon is normal. The latest news is that Glencore first-quarter output decreased 4%, because Congo’s Katanga stopped production and Zambia’s Mopani reduced half production. But South America copper mine output increase made up part output reduction. 2016 output plan is 1.39 million tons, and 2015 output is 1.5 million tons. Technically, copper price is still weak, and we recommend it has the possibility of reaching resistance position of downward fluctuation interval; LME is $4700 and domestic is RMB 36000.
Domestically, DCE soybean night section slightly rallied; rallying oil made oil against meal ratio recovery. Nowadays Northeast district is during spring sowing, and most farmers are busy at preparing soil for seed or sowing wheat and corn. Soybean purchasing and selling have cleared the way to spring sowing. Some grain point has stopped buying, and buying is difficult at some areas. Basic level surplus grain low volume boosts soybean price. Pay attention to later period surplus grain volume and state reserve soybean action factor. From soybean meal side, spots price slightly decreased RMB20-40/ton, oil plant quotation was around RMB 2500-2650/ton. Oil plant operation rate is high, and nowadays dealing is good. This is benefit for release storage pressure. Port volume is expected to increase after midmonth. Spots price will return under pressure, and before this, soybean meal price will stay strong. As for operation: we recommend reducing soybean meal long holdings and, paying attention on the performance of arbitrage between oil and meal at 2.3:1.
Nature Rubber
Yesterday Shanghai rubber dropped with fluctuation, testing average 20. US spots market dropped following overseas section. Up to spots trading period: domestic spots price is 1460-1470(-20); domestic cargo price is 1450-1460(-20); US RSS spots price is 1620-1640(-20); US RSS cargo price is 1660-1700(-40); mixed rubber price is 11400-11500(-100). From news side, domestic heavy truck market sold 67000 cars this April, increased 14% compared with 58700. This is the third straight rapid growth month of heavy truck market. Overnight US April ADP employment created the lowest point, and was far from expectation. But US index maintain sideways near 91. Overall, overseas spots market dropped before holiday, and macro atmosphere still optimistic. After Futures Exchanges increased margin, market short and long momentum both decreased and, market enthusiasm dropped; tendency was estimated turned to strong volatile from unilateral upward trend.
Yesterday PP futures opened low with fluctuation; opened at 6798 and ended at 6811; trading volume increased 24498 lots to 715,000 lots; holding increased 28068 lots to 590,000 lots. From spots side, yesterday domestic PP market price was mainly in slightly downward trend. South China of petrochemical cut the production price, bolster from supply costs to market has plainly dropped; agency mostly ship following the downward trend. Plants in downstream purchase in light volume, trading and investing momentum is thin.
Intraday main quoted prices for wires of north China, east China and south China markets are RMB 6700-6900/ton, RMB 6800-7000/ton and RMB 6800-7000/ton, respectively.
As for operation, current moving average system turns to downward; MACD green column extends as retrace pattern.
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