Daily Report 190716 2016-07-19
Monday domestic and overseas copper market rallied after dropping, and copper price meets bolster during rally. The total macro atmosphere is benefit to copper market. Fundamental side, Monday LME inventory decreased 1850 tons to 229000 tons. Spot discount was $17. Fundamental side news, Rio Tinto the second season copper output was 141000 tons; lower than expected 153300 tons. Rio Tinto claims that 2016 output will maintain expected 575000 to 625000 tons. Technically, copper price rally tendency still exits, and pay attention to US dollar index change in the short-term.

Macro Economy
Domestically, Central Bank operates MLF to 14 financial institutions, releasing 227 billion liquidities; interest rate is same with last term. Central Bank’s statement about this MLF operation is very interesting. It claim that, “ to keep bank system liquidity reasonable enough, and 218.5 billion MLF will in due on the second half of July, Central Bank operates 227 billion MLF to 14 financial institutions”, which means this MLF aims to hedge the MFL due on July, and market shouldn’t read too much to it. Actually, besides this 218.5 billion MLF, another 83.5 billion will due in 91 days. Totally, if there is no new hedge operation in the future, MLF withdraw is more than put.

Yesterday PP futures fluctuated at low point; opened at 8128 and closed at 8068. Trading volume increased 28922 lots to 544000 lots. Holding volume decreased 19314 lots to725000 lots. Spot goods side, yesterday PP market was stable and loose, and partial price slightly deceased RMB 50/ton. PP futures operate at low price position, stroke to market mindset. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 7900-8000/ton, RMB8150-8300/ton and RMB8150-8250/ton, respectively. Currently moving average system twines. MACD green column lengthen, which is rolling back tendency.

Stock Index
Yesterday stock index slightly rolled back, and reached high point at April. This rally is under the background of insensitive of macro data decrease and supply-side reform settled for main line. Since the beginning of May authorities claimed supply-side reform; President Xi raised ‘rejuvenate nation through science and technology’, and the State Council surveyed private investment. Chairman Xi points out in July that we need to stay firm in the reform of state-owned enterprises as well as supply-side, rendering the market reassured. Meanwhile, various pilot project s of central enterprises are fully underway. The reform will be better not worse. Moreover, the market holds some expectations over the interim statements.
                                                                             Dong LV (Investment Certificate NO. TZ008452)