Daily Report 080816

Nature Rubber
Last week domestic commodity market fluctuated. Shanghai rubber near month and forward month continued differentiating. Till Friday actuals trading time: domestic spots price is 1280-1290; domestic cargo price is 1280-1300; US RSS spots price is 1640-1680; US RSS cargo price is 1630-1700; Singapore cargo price is 1310-1330; Thai cargo price 1330-1350; mixed rubber price is 10400-10450. Rubber industry keeps stable. SHFX inventory increased 2071 tons to 353113 tons. Futures inventory decreased 650 tons to 310180 tons. Overall, the structure of forward and actuals and the contradiction brought by high inventory keep Shanghai rubber price with weak near month price and strong far month price. September long position closing stress exits. January contract is strong as a result of macro level long atmosphere. Although delivery month is near, the price is difficult to restrain. Recommend short-term speculate under long-short games.
Last week PP futures continued fluctuating sideways. Upstream side, till Friday night, FOB Korea propylene average price is $710.5/ton. Actuals side, last week domestic PP market price slightly increased. Most Sinopec districts increased factory price to bolster market. Supply is tight at the beginning of month, so traders quote a little high. But actuals market lack trading volume from terminal market. Traders lack the motion to chase price. Intraday main quoted prices for wires of north China, east China and south China markets are RMB 7950-8100/ton, RMB 8200-8450/ton and RMB 8150-8250/ton, respectively. MACD exposure downward extended. Recently is expected to continue fluctuation. Recommend for observe.
Domestically, soybean meal followed overseas section tendency. Oil against meal ratio rallied following price rally. Northeast China soybean price continued downward tendency. Most districts price dropped RMB 3900/ton. With the auction and outbound of national inventory soybean, market supply is replenished. Last Friday traded 100000 tons. Trading average price is RMB 3328/ton. Soybean meal side, actuals is bearish and stable. Last week drop range is obvious. Coastal oil plant quotation maintains RMB 3020-3060/ton. Domestic import soybean supply is sufficient. As for operation, we consider forward soybean tendency will continue fluctuation. Recommend short with low volume or arbitrage with buying oil and selling soybean meal.
Last week copper market was bearish, and went down when blocked. Last week three main exchanges inventory hasn’t change much; totally reduced 439 tons to 440000 tons. Supply side, Free Port Indonesia business still has much uncertainty. This includes whether the extension of production license can be hold. Since GRASBERG copper quality is not stable. Free Port declined its output by 45000 tons at its second season report. Newest CFTC reports showed that funds position begun reduce long and increase short. Long position was largely reduced. LME position is high. Copper price downward tendency stress on short. Technically, recently copper price drop with fluctuation, and last week broke median line. We tend to consider still has the space to go down. Recommend short and control risk.
                                                                            Dong LV (Investment Certificate NO. TZ008452)