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Monday, February 16, 2015
(HKSFC CE No. AGO928)
CommoditiesMorningExpress
News Headlines
Precious Metals
High
Low
Gold Spot ($/oz)
1235.20
1220.51
1229.20
7.00
0.57%
COMEX Gold Apr15 ($/oz)
1234.90
1222.50
1227.90
6.20
0.51%
Silver Spot ($/oz)
17.4300
16.8000
17.2900
0.4700
2.79%
COMEX Silver Mar15 ($/oz)
17.4300
16.8350
17.3200
0.4850
2.88%
Japan emerges from recession but subdued growth underscores
policy challenge
–
–
–
Q4 GDP up annualised 2.2 pct vs f'cast +3.7 pct
External demand adds to growth on steady exports
Consumption, capex rise but less than expected
(Reuters)
Policymakers eye rate, RRR cuts, weaker yuan to support growth
Aim to keep economic growth around 7 percent this year
Steady growth seen needed to keep job market stable
Fear sharper slowdown may undermine public support for reforms
(Reuters)
Greece, confident as EU meeting looms, sticks to no-austerity pledge
–
–
–
–
Tsipras says in six months Greece will be "different country"
Eurogroup finance ministers meet in Brussels on Monday
Failure to make progress could trigger credit crunch
No concrete sign yet of either side backing down on key points
(Reuters)
Kiev military say rebels stepping up attacks on Debaltseve
OSCE observers denied access to town on railway junction
Kremlin declines to comment
U.S. urges Russia to implement ceasefire in full
(Reuters)
SPDR gold holdings down 0.42 pct, or 3.25 tonnes
–
–
SPDR Gold Trust GLD said its holdings fell 0.42 percent to 768.26 tonnes
on Friday from 771.51 tonnes on Thursday
CFTC data showed speculators cut their net long position in gold by
28,034 contracts to 133,964 contracts during the week to Feb. 10
(Reuters)
% Chg.
Platinum Spot ($/oz)
1213.20
1191.50
1206.50
7.35
0.61%
1215.00
1196.90
1208.30
8.70
0.73%
Palladium Spot ($/oz)
794.70
767.50
791.20
16.20
2.09%
NYMEX Palladium Mar15 ($/oz)
795.00
772.50
790.20
15.60
2.01%
London Fixes
Gold
Silver
Platinum
Palladium
AM ($/oz)
1225.75
16.86
1200.00
778.00
PM ($/oz)
1232.50
1201.00
786.00
Energy Products
High
Low
Close*
Chg.
% Chg.
NYMEX WTI Mar15 ($/bl)
53.43
51.03
52.65
1.31
2.55%
ICE Brent Apr15 ($/bl)
61.77
59.08
61.41
2.17
3.66%
NYMEX RBOB Gasoline Mar15 ($/gal)
1.6367
1.5975
1.6215
0.0264
1.66%
NYMEX NY Harbor ULSD Mar15 ($/gal)
1.9821
1.9139
1.9716
0.0527
2.75%
ICE Gasoil Mar15 ($/mt)
587.00
570.25
584.25
13.00
2.28%
NYMEX Natural Gas Mar15 ($/mmBtu)
2.811
2.656
2.796
0.079
2.91%
Ukraine rebels disavow ceasefire at encircled town
–
–
–
–
Chg.
NYMEX Platinum Apr15 ($/oz)
China sees 7 pct growth floor in reform trade-off -sources
–
–
–
–
Close*
Currencies
High
Low
Close*
Chg.
% Chg.
EUR | USD
1.1441
1.1378
1.1383
-0.0019
-0.17%
USD | JPY
119.19
118.40
118.72
-0.38
-0.32%
AUD | USD
0.7792
0.7721
0.7768
0.0035
0.45%
USD | CHF
0.9335
0.9263
0.9321
0.0013
0.14%
USD | CNH
6.2463
6.2355
6.2426
0.0026
0.04%
DOLLAR INDEX SPOT (DXY)
94.3090
93.8990
94.2010
0.1070
0.11%
*The close price of a future contract represents the last trade price before the electronic session close yesterday
In the case of spot, the close price is as of 5pm NY Time
Page | 1
Monday, February 16, 2015
CommoditiesMorningExpress
Precious Metals
Gold was moderately higher last Friday on back of softer USD and the weaker U. of Michigan consumer c onfidence number
but range wise it was still pretty much being confined between $1220 - $1235 with lower volume coming through due to long
weekend ahead in the U.S. and upcoming Chinese new year holiday which last for around 2 weeks in that region and hence
trading activity will most likely quite down.
Silver outperformed the yellow metal following U.S. session opened as it caught bid from $16.80 level and didn’t take long to
rally past through the $17 mark in almost straight line fashion and made the high @ $17.43 before rounding up the day @
17.35. PGMs were also higher on back of healthy physical demand out of china (even in the time of year to our surprise!!) with
platinum moving back up to $1215 while palladium gaining more than $15 and settled the day above $790.
Market focus will be on Greece again later on today as officials from Greece and the European Union are due to hold fresh
talks after discussions on a new debt deal last week ended without an agreement. The U.S . FOMC minutes will also be out this
Wednesday and that should create some sparks to this otherwise lackluster market.
Page | 2
Monday, February 16, 2015
Energy Products
CommoditiesMorningExpress
Crude
th
Crude oil prices continued the up-trend from Feb 11 as EU economic growth exceeded expectations, and investors are
looking to another drop in the US oil rig count. Since Germany, in EU, particularly grew at more than twice the expected
rate, the market saw an acceleration in Euro zone economic growth in the final quarter of 2014, which spurred the
expectation the oil usage to be increased. Meanwhile, traders were also pricing in another weekly drop in the US oil rig
count, ahead of industry data due later in the day. The rig count fell last week to a three -year low. In addition, investors
also are expecting a weakening USD as the US Commerce Department reported on Thursday that retail sales declined
by 0.8% last month, worse than expectations for a drop of 0.5%. Retail sales fell by 0.9% in December.
NYMEX traded WTI for March delivery lifted $1.31 on each barrel, or 2.55%, and ended the last Globex session at
$52.65. ICE traded Brent for April settlement opened high and broke the high of 2015 at $59 and surged $2.17 on each
barrel for the whole day, or 3.66%, and ended the e-trading session at $61.41.
Brent reached the highest of 2015 [Source: Bloomberg]
Inventories of Crude and Products
th
In the week ending 6 Feb, 2015
(million barrels)
Stocks
Weekly
Change
Crude
417.9
+4.9
Gasoline
Distillates
242.6
131.2
+2.0
-3.3
Aggregated
1868.9
+2.2
(EIA: Data released on 11 Feb, 2015)
(Next Release Date: 19 Feb, 2015)
Page | 3
Monday, February 16, 2015
CommoditiesMorningExpress
Gasoil
The Asian gasoil margin rose on Friday boosted by a big jump in underlying crude oil prices. Vietnam's Saigon Petro has extended
the validity of its tender seeking 10,000 mt of 500 ppm sulphur gasoil to Friday. Diesel flows from ASEAN countries to Vietnam are
expected to rise from this year, after an import tax cut for the fuels that took effect from Jan. 1 possibly redrawing trade flows in the
region. On the concluded deal, Total bought from Lukoil 150,000 bbl of 500 ppm sulphur gasoil for Mar. 2-6 delivery at a discount of
$0.30/bbl to Singapore spot quotes.
Fuel Oil
The 380-CST cash premium remained firm on Friday as the supply of on-specification fuel was in short supply. Fuel oil supply into
Asia from the West is expected to slip in March, following heavy inflows in February due to shipment delays. Some reprieve was
seen with more spot supply from India with Indian Oil Corp offering a small cargo for early March loading. Japan's demand of fuel
oil has dipped with the country consuming and buying nearly 30 percent less fuel oil in January, compared with December, data
from the Federation of Electric Power Companies of Japan showed on Friday. This could partly be due to a 4.8 percent cut in use
of fossil fuel-fired power output by the utilities. On the spot market, BP bought from Mitsui 20,000 mt of 380-CST bunker for Feb.
28-Mar. 4 loading at a premium of $3/mt to Singapore spot quotes.
2015
2015
Page | 4
Monday, February 16, 2015
Base Metals
LME daily stock (in tonnes):
CommoditiesMorningExpress
Base Metals
High
Low
Close
Chg.
% Chg.
Base Metals
Total stock
Net change
Stock on warrant
LME Aluminum ($/tonne)
1,848.00
1,836.50
1,836.50
-5.00
-0.27%
LME Aluminum
3,982,775
-5,925
1,728,000
LME Copper ($/tonne)
5,740.00
5,715.00
5,735.00
-5.00
-0.09%
LME Copper
295,300
2,550
260,400
LME Lead ($/tonne)
1,849.50
1,840.00
1,849.50
15.50
0.85%
LME Lead
213,675
-350
201,625
LME Nickel ($/tonne) 14,750.00 14,630.00 14,645.00
-60.00
-0.41%
LME Nickel
426,228
918
321,828
LME Tin ($/tonne) 18,300.00 18,200.00 18,275.00
275.00
1.53%
LME Tin
11,500
-410
9,355
5.00
0.23%
LME Zinc
595,075
-3,500
397,300
LME Zinc ($/tonne)
2,163.00
2,151.00
2,151.00
The close price is as of 5pm London Time. (Reuters)
(Reuters)
Base metals have been slowly falling into pre-holiday hibernation mode ahead of CNY as
the majority of Asian players squaring books ahead of effectively 2 weeks long holiday.
After nearly touching 5800 overnight, copper drifted lower towards London opening and
spent the rest of the day within a relatively narrow $30 range. SHFE weekly copper
inventories increased by hefty 16.3k mt (+12%) to 155.7k mt, highest since April 2014.
The stock arrivals unsurprisingly coincided with expiry of February contract (next Monday)
and also reflected higher availability in Chinese domestic copper market in China, which
st
subsequently affected the tightness in SHFE spreads (the backwardation between 1 and
rd
3 contract has reduced from RMB 600-1000 ($100-160) to modest RMB 300 (appx $50)
recently (see the chart). Worth mentioning that aggregated open interest has also
decreased by massive 38k lots as shorts took profit ahead of the holidays, therefore
reducing borrowing pressure on the spreads.
Tin performance stood out once again as PT Timah, one of the largest Indonesian
producers, announced the halt in sales till the price recovers above 19k. Unsurprisingly,
tin closed the day 1.5% higher at 18275. Lead also managed to recover the previous
losses and finished the day on the highs at 1849.50, up 0.85%, although the turnover
remained scarce. While crude short-covering rally continued as both WTI and Brent
spiked by 3.5% on Friday, copper and aluminium got completely left behind. The light
metal, which allegedly should have higher correlation to energy prices due to high power
component in its cost structure, completely failed to follow the crude and, after touching
the high of 1858, drifted lower finishing the day at 1836.5. In the meantime, Metal Bulletin
dropped its benchmark Duty-Unpaid premium in Rotterdam by nearly $20 to $341/mt
reflecting higher availability of the physical metal on spot market with less material being
financed (the highest premium was registered by MB in mid-November at $427/mt).
st
rd
SHFE Copper spread between 1 and 3 contract (red line) versus total SHFE
Copper stocks (yellow line) [Source: Bloomberg]
Page | 5
Monday, February 16, 2015
CommoditiesMorningExpress
Iron Ore
Market Highlights
 The iron ore market surged for a second day on Friday as more buyers came in betting
on a price recovery in March. More traders began to take positions during the last two
trading days as the cargoes being offered were mostly for delivery in March, when mills
are expected to restock after the CNY holidays. There was also higher buying interest
from mills as they also consider that the iron ore prices are still quite low at the moment
and will firm up going into March. TSI 62% index rose 50 cents to $63.3/dmt while Platts
62% index rose $1.00/dmt to $64.25/dmt. The most actively traded DCE iron ore May
contract rose 2.09% or ¥10 on day before closing at ¥489. Shanghai Rebar May futures
rose 1% or ¥25 to ¥2514/dmt. Spot Tangshan billet stayed unchanged at ¥1990/mt.
According to Mysteel, iron ore port stocks was at 96.69 million mt last Friday, fell 1.79
million mt WoW.
 China M2 money supply rose 10.8% YoY in December, the slowest growth rate in nearly
20 years. Further RRR and benchmark rate cuts and other stimulus are expected in H1
2015 as PBOC tries to keep money supply at a reasonable level.
Physical Trades
 GO1: BHP Billiton sold 90,000 mt 60.8% MAC fines at $63/dmt co-loaded with 80,000
mt 57.3% Yandi fines at $54.30/dmt CFR China on COREX, loading March 21-30.
 GO2: Vale sold a 85,000 mt cargo of 64.78% IOCJ fines at $70.75/dmt CFR Qingdao on
globalORE, contains 1.5% alumina and 2.82% silica, arriving in March.
Technical Analysis
 DCE IO May closed at 489, just above the last resistance we set at 487 - the ½ point of
the last downtrend. It also crossed above the 20-day and 40-day MA while volume rose
to a 1-wekk high. The next resistance is the 62% fib retracement at 501. Support is the
record low set on Dec 26 (466).
 Shanghai Rebar May contract closed at 2514, crossed above the 40-day MA. It broke
through the upper trendline of the pennant shape. Short term resistance is the 62%
retracement at 2523, while short term support is the 2-week trendline at 2482, then the
100% fib retracement (record low) at 2437.
Close
TSI 62% ($/dmt)
63.30
Platts 62% ($/dmt)
64.25
DCE May (¥/dmt)
489
CISA Seaborne 62% ($/dmt)
62.79
CISA Port Inventory 62% (¥/dmt) 505.88
CISA Seaborne 58% ($/dmt)
54.08
CISA Port Inventory 58% (¥/dmt) 440.34
SHFEX REBAR (¥/mt)
2514
SHFEX HRC (¥/mt)
2610
Tangshan Billet (¥/mt)
1990
(Platts/TSI/Reuters/DCE/SHFEX/CISA)
Country
Germany
Germany
Euro Area
Euro Area
U.S
U.S
U.S
U.S
Prev
62.80
63.25
479
61.78
498.58
53.64
435.26
2489
2596
1990
Indice / Event
Q4 GDP Growth Rate YoY Prel
Q4 GDP Growth Rate QoQ Prel
Q4 GDP Growth Rate YoY Prel
Q4 GDP Growth Rate QoQ Prel
JAN Export Price Index MoM
JAN Import Price Index MoM
FEB Michigan Consumer Expectation
FEB Michigan Consumer Sentiment
∆
0.50
1.00
10
1.01
7.30
0.44
5.08
25
14
0
∆%
0.80%
1.58%
2.09%
1.63%
1.46%
0.82%
1.17%
1.00%
0.54%
0.00%
High
124.4*
64.75
493
Low
61.1*
63.75
479
2520
2622
2487
2586
*Past 12 months
Previous
1.2%
0.1%
+0.8%
+0.2%
-1.0%
-1.9%
91.0
98.1
Forecast
1.0%
0.3%
+0.8%
+0.2%
-0.9%
-3.2%
92.2
98.1
Actual
1.6%
0.7%
+0.9%
+0.3%
-2.0%
-2.8%
87.5
93.6
News
Anglo American Reports Another Net Loss on Write-Downs WSJ
ArcelorMittal surprises on debt despite bearish outlook Reuters
China’s Credit Growth Accelerates in Boost to Economic Outlook Bloomberg
Rio CEO Walsh Defends Iron Ore Strategy as Prices Collapse Bloomberg
WTO rules against China in row with EU, Japan over steel pipes The Daily Star
Page | 6
Monday, February 16, 2015
Steel & Raw Materials Historical Prices Curves
(USD$/mt)
550
115.0
Steel Main
Raw Material
Forward Curves
(USD$/dmt)
Steel Main Raw
Material
Forward
Curves
(USD$/dmt)
85
116
CommoditiesMorningExpress
105.0
115
500
95.0
75
450
114
85.0
113
75.0
400
65
112
65.0
350
111
55.0
SH Rebar (LHS)
300
2014/8/13
ASEAN HRC (LHS)
TSI IO 62 (RHS)
2014/9/13
MBIO 58 (RHS)
2014/10/13
2014/11/13
IO TSI (LHS)
IO DCE (LHS)
Tangshan (LHS)
DCE IO (RHS)
2014/12/13
2015/1/13
45.0
2015/2/13
China Hot Metal Spread TSI (USD$/dmt)
IO Platts (LHS)
TSI Coking Coal (RHS)
55
110
Spot
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Cal16
Cal17
Steel Forward Curves (CNY/dmt)
3200
310
2900
280
2600
250
2300
Rebar
China Hot Metal Spread TSI
220
13/8/2014
HRC
2000
13/9/2014
13/10/2014
13/11/2014
13/12/2014
13/1/2015
Mar-15
13/2/2015
Apr-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Q415
Cal-16
Cal-17
Cape & Panamax Forward Curves (USD$/day)
Iron Ore 62-58 Index Spreads (USD$/dmt)
12.0
May-15
15000
12000
9.0
9000
6.0
6000
TSI 62-58 Spread
3.0
17/11/2014
Cape
Platts 62-58 Spread
Panamax
3000
1/12/2014
15/12/2014
29/12/2014
12/1/2015
26/1/2015
9/2/2015
Spot
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Page | 7
Monday, February 16, 2015
What to Watch
CommoditiesMorningExpress
Economic Data – Week of Feb 16 – Feb 22
Country/Region
Japan
China
China
Germany
U.S.
Date
Feb 16
U.S.
Japan
U.S.
Feb 18
U.S.
Feb 19
Feb 17
Japan
Euro zone
U.S.
U.S.
Japan
Germany
Euro zone
U.K.
U.S.
Feb 20
Event
GDP QQ
FDI (YTD) YoY
House Price Index YoY
ZEW Economic Sentiment
NY Fed Manufacturing
NAHB Housing Market Index
Net Long-term Tic Flows
BoJ Interest Rate Decision
Building Permits: Number
Housing Starts Number MM
PPI Final Demand MM
Manufacturing Output MM
API weekly crude stocks
FOMC Minutes
BoJ Monthly Report
Consumer Confidence Flash
Initial Jobless Claims
Philly Fed Business Index
EIA Nat Gas, Change Bcf
EIA Weekly Crude Stocks
Markit/JMMA Manufacturing PMI Flash
Markit Manufaturing Flash PMI
Markit Service Flash PMI
Markit Manufaturing Flash PMI
Markit Service Flash PMI
Retail Sales MM
Markit Manufaturing PMI
Period
Q4 2014
Jan 2015
Jan 2015
Feb 2015
Feb 2015
Feb 2015
Dec 2014
Jan 2015
Jan 2015
Jan 2015
Jan 2015
w/o Feb 08, 2015
Feb 2015
w/o Feb 08, 2015
Feb 2015
w/o Feb 07, 2015
w/o Feb 07, 2015
Feb 2015
Feb 2015
Feb 2015
Feb 2015
Feb 2015
Jan 2015
Feb 2015
Prior
-0.4%
1.7%
-4.3%
48.4
9.95
57.0
$33.5B
1.03M
1.09M
1.1%
0.3%
-8.5
304K
6.3
-160
4.87M
52.2
51.0
52.7
51.0
52.3
0.5%
53.7
Forecast
0.9%
56.0
10.0
58.0
$42.2B
1.06M
1.07M
0.3%
0.3%
-7.5
290K
10.0
3.73M
51.9
51.5
54.3
51.5
53.0
-0.2%
53.5
Source
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Tradingeconomics
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Tradingeconomics
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Page | 8
Contacts
CommoditiesMorningExpress
CMF (HK) Precious Metals
WILLIAM CHAN
CE No. AGM443
[email protected]
SIMON WONG
CE No. BBX031
[email protected]
ANGIE LIU
CE No. AYW745
[email protected]
STEPHEN YEK
CE No. BCU327
[email protected]
LEI DING
CE No. ATJ498
[email protected]
JOE YAM
CE No. AMK311
[email protected]
CE No. AMY782
[email protected]
CE No. BEJ470
[email protected]
CMF (HK) Energy Products
CMF (HK) Base Metals
VICTOR CHEW
CMF (HK) Iron Ore
LIN DEJEAN
Disclaimer
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Precious Metals Team
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Tel: +852 3189 6228
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Tel: +852 3189 6330
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Page | 9