Comm odities Mo rningExp ress

Friday, December 12, 2014
(HKSFC CE No. AGO928)
Precious Metals
High
Low
Gold Spot ($/oz)
1232.80
1215.90
1227.55
0.85
0.07%
COMEX Gold Feb15 ($/oz)
1233.40
1216.40
1227.70
2.10
0.17%
Silver Spot ($/oz)
17.2000
16.8700
17.0800
0.0300
0.18%
COMEX Silver Mar15 ($/oz)
17.2400
16.9450
17.0950
0.0200
0.12%
CommoditiesMorningExpress
News Headlines
U.S. crude drops below $59 to 5-1/2-yr low on supply glut
–
–
–
Front-month U.S. crude fell to as low as $58.8, the weakest intraday
level since July 2009
The contract has lost more than 10 percent so far this week, on course
for a third weekly drop
Brent has nearly halved in value since June when it traded above $115.
It has lost nearly 8 percent this week
(Reuters)
China tells banks to step up lending to lift flagging
–
–
–
Increases loan target to 10 trillion yuan for 2014
Relaxes enforcement of loan-to-deposit ratios
Banks have to increase pace of lending to hit target
(Reuters)
Core retail sales up 0.6 percent in November
Retail sales rise broadly, boost consumption outlook
(Reuters)
–
In the week ending Dec. 6, the advance figure of seasonally adjusted
initial claims for jobless benefits decreased to 294,000, 3,000 less than the
revised level of the previous week
the four-week moving average edged up by 250 to 299,250 last week.
(Reuters)
Modi to Putin: Russia to stay India's top defence partner
–
–
India and Russia signed billions of dollars of deals in nuclear power, oil
and defence
In the biggest, state-owned Rosatom will build 12 nuclear reactors in India,
oil major Rosneft signed a 10-year crude supply deal with Essar Oil and
India agreed to assemble 400 Russian multi-role helicopters a year
(Reuters)
% Chg.
Platinum Spot ($/oz)
1250.80
1224.40
1240.25
1.15
0.09%
1252.50
1231.30
1240.00
-0.80
-0.06%
Palladium Spot ($/oz)
821.90
807.40
819.25
5.95
0.73%
NYMEX Palladium Mar15 ($/oz)
823.00
813.80
818.70
4.85
0.60%
London Fixes
Gold
Silver
Platinum
Palladium
AM ($/oz)
1219.50
16.98
1238.00
817.00
PM ($/oz)
1216.25
1230.00
817.00
Energy Products
High
Low
Close*
Chg.
% Chg.
NYMEX WTI Jan15 ($/bl)
61.68
58.96
59.15
-2.07
-3.38%
ICE Brent Jan15 ($/bl)
65.13
63.05
63.26
-1.07
-1.66%
NYMEX RBOB Gasoline Jan15 ($/gal)
1.6613
1.6160
1.6190
-0.0265
-1.61%
NYMEX NY Harbor ULSD Jan15 ($/gal)
2.0958
2.0505
2.0535
-0.0018
-0.09%
ICE Gasoil Jan15 ($/mt)
588.25
573.00
574.00
-8.75
-1.50%
NYMEX Natural Gas Jan15 ($/mmBtu)
3.778
3.614
3.648
-0.068
-1.83%
U.S. initial jobless claims decline to three-week low
–
Chg.
NYMEX Platinum Jan15 ($/oz)
U.S. consumer spending gains steam, boosted by lower gas prices
–
–
Close*
Currencies
High
Low
Close*
Chg.
% Chg.
EUR | USD
1.2494
1.2368
1.2409
-0.0038
-0.31%
USD | JPY
119.55
117.43
118.65
0.84
0.71%
AUD | USD
0.8375
0.8213
0.8271
-0.0046
-0.55%
USD | CHF
0.9710
0.9625
0.9680
0.0016
0.17%
USD | CNH
6.1986
6.1742
6.1957
0.0167
0.27%
DOLLAR INDEX SPOT (DXY)
88.7860
87.9130
88.6630
0.3920
0.44%
*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
Friday, December 12, 2014
Precious Metals
CommoditiesMorningExpress
A Hiccup on Retail Sales
The stronger than expected US retail sales seems to underscore the fact that the US continues to be a healthy growth engine. It gave the dollar, equities
and yields a modest succor but only modestly. When gold was sold, there wasn’t so much defensive effort at $1220 as expected. The skid we nt deep to
as low as $1216 before steadying. Seeing no follow-through after a low print on the PM fix, shorts scrambled to cover, racing gold dramatically past
intraday high to $1232 before giving back $8 to settle around $1225. Silver replicated Wednesday’s range finishing $17.10. There was some risk reversal
activity in silver which suggests perhaps some producer hedging. A note on the side, the platinum – gold spread has narrowed further to $13, seemingly
one way street since it ran into a wall at $30 on Monday (chart below). Not a lot of key data today but think stocks may struggle a bit.
Chart of the day – XPT-XAU Spread Daily
[Thomson Reuters]
Page | 2
Friday, December 12, 2014
Energy Products
CommoditiesMorningExpress
Crude
Better than expected economic data continued to show the improvement of US economy on Thursday. US Retail Sales rose
0.7% <exp.0.4%> in November, the most in eight months, as consumers are more willing to spend money due to lower
energy cost and rising employment. Initial Jobless claims last week also fell to 3-week low as the improvement of US
economy encouraged hiring and limited dismissals. Crude oil stayed mute in Asian and London hours. However, it opened
near session low in New York as US dollar strengthened due to good economic data. WTI fell as much as USD 0.85 or
equivalent to 1.39% to low 60.09 and Brent fell as much as USD 0.54 or equivalent to 0.84% to low 63.70 near New York
opening. WTI rebounded near psychological support USD 60 and Brent followed WTI to bounce back. Both benchmark
fluctuated in a tight range for most of the day and fell again in the last half an hour in New Yo rk. WTI finally spiked through
USD 60 in the last 15 mins of New York session and closed around that level.
WTI Crude futures for January delivery dropped USD 2.07 or equivalent to 3.38% in New York and settled at USD 59.15.
Brent crude oil in ICE for January settlement dropped USD 1.07 or equivalent to 1.66% in New York and settled at USD
63.26. The Jan Brent-WTI spread widened to 3.73 from previous 3.30 at settlement.
Natural Gas
EIA Natural Gas storage report showed that the gas stockpile decreased by 51 billion cubic feet <exp. -44> last week.
Natural Gas future spiked as much as USD 0.072 or equivalent to 1.94% to day high 3.778 immediately after the data came
out. However, the contract reversed its gain and fell as much as USD 0.092 or equivalent to 2.48% to day low 3.614 in one
and a half hour time afterwards as near-term forecasts showed above-normal temperatures in December. WSI Crop
forecasted that warmer than usual weather will be observed through 20 Dec across most of the contiguous US.
AccuWeather Inc. predicted that the low in Boston on 16 Dec will be 34 degree Fahrenheit, which is 6 degree above
average. The contract for January delivery was settled at USD 3.648 and down about 1.83% in New York.
Inventories of Crude and Products
th
In the week ending 5 Dec, 2014
(million barrels)
Stocks
Weekly
Change
Crude
380.8
+1.5
Gasoline
Distillates
216.8
121.8
+8.2
+5.6
Aggregated
1,819.6
+7.4
(EIA: Data released on 10 Dec, 2014)
(Next Release Date: 17 Dec, 2014)
Weekly Natural Gas Storage
th
In the week ending 5 Dec, 2014
(billion cubic feet (Bcf))
Stocks
Natural Gas
3,359
Weekly
Change
-51
(EIA: Data released on 11 Dec, 2014)
(Next Release Date: 18 Dec, 2014)
Page | 3
Friday, December 12, 2014
CommoditiesMorningExpress
Gasoil
Singapore onshore gasoil and jet fuel inventory went down last week, but failed to boost margins of the oil products as demand still
remained lukewarm in the region. January gasoil crack slipped 17 cents to $15.90 a barrel to Dubai crude. While diesel exports
from Singapore to Australia and Malaysia dropped last week from the previous week, imports of the fuel from India also fell. Diesel
was also shipped to New Zealand, the Philippines and Vietnam last week, compared with none the week before. Falling fuel prices
and stronger economic growth will enable global airlines to report $19.9 billion of net profit in 2014, up from a previous forecast of
$18 billion. This could translate into lower airfares, which in turn could stoke demand for jet fuel.
Fuel Oil
The Asian 380-CST fuel oil premium slid for the sixth consecutive day Thursday to a one-month low. The downward pressure in the
market led to no spot fuel oil trade concluded yesterday. The 380-CST fuel oil premium fell $1.66/mt to $3.08 /mt to Singapore spot
quotes Thursday. Outstanding offers from Vitol and Lukoil at a premium of $3.50 /mt to Singapore spot quotes for cargoes loading
over Dec. 26-30, Jan. 1-5, and Jan. 6-10, were not met with any buying interests. Comparatively, the most competitive bids for the
380-CST cargoes were at a premium of $1 /mt. Looking ahead, supplies from the West are projected to stay elevated in January,
with estimates above 4 million mt. In other news, fuel oil stocks in Singapore fell 427,000 barrels to a two-week low of 18.653
million barrels in the week to Dec. 10, trade data from IE Singapore showed Thursday. This was despite exports more than halving
to 295,000 mt, led by a decline in shipments to Malaysia and Hong Kong.
Page | 4
Friday, December 12, 2014
Base Metals
LME daily stock (in tonnes):
CommoditiesMorningExpress
Base Metals
High
Low
Close
Chg.
% Chg.
Base Metals
Total stock
Net change
Stock on warrant
LME Aluminum ($/tonne)
1,957.00
1,946.50
1,946.50
-12.50
-0.64%
LME Aluminum
4,301,700
-825
2,015,975
LME Copper ($/tonne)
6,465.00
6,422.00
6,462.50
47.50
0.74%
LME Copper
166,450
375
151,200
LME Lead ($/tonne) 20,350.00
1,980.00
1,980.00
-33.00
-1.64%
LME Lead
220,200
-150
210,775
LME Nickel ($/tonne) 16,280.00 16,230.00 16,280.00
-45.00
-0.28%
LME Nickel
406,524
-1,044
314,640
LME Tin ($/tonne) 20,525.00 20,275.00 20,400.00
150.00
0.74%
LME Tin
11,245
100
10,020
16.00
0.73%
LME Zinc
687,550
5,700
598,700
LME Zinc ($/tonne)
2,196.00
2,164.00
2,196.00
The close price is as of 5pm London Time. (Reuters)
(Reuters)
Christmas party season is at its peak and it seems that the holiday mood has
established across base metals markets. Very mediocre volumes across the board
and lack of intraday volatility among major metals confirms the risk-aversion
dominating across market players, who prefer to stay on the safe side ahead of the
year end. US retail sales and weekly jobless claims data released in the afternoon
turned out to be better than expected and gave a moderate lift to the sluggish
performance of base metals.
Zinc managed to make the dramatic turnaround closing at 2196, above 200d MA and
0.7% higher on the day after nearly reaching 2150 (nearly 2% intraday move from low
to high). Lead, a sister-metal of zinc, moved in the opposite direction in the afternoon
settling right on the intraday low at 1980 (-1.64% on the day) and less than $30 away
from the lows of this year (see the chart). Lead fundamentals have also been
deteriorating with surplus being registered of the fifth month in a row on the back of
slowing down of demand in China, which accounts for about 42% of the total world’s
consumption. Copper was relatively well-supported throughout the day and closed
0.74% higher at 6462.5, however, volumes remained subdued. Aluminium was also
under pressure today dropping below 1950 support level towards the close and settled
0.64% down at 1946.5. Dec-jan slightly tightened from 10c to 7c but still a long way to
go to the hefty backwardation, which was there in the middle of November.
LME Lead 3M price chart [Source: Bloomberg]
Page | 5
Friday, December 12, 2014
Iron Ore
CommoditiesMorningExpress


Market Highlight
Seaborne iron ore market was stable on Thursday. TSI 62% index was assessed at $68.8/mt,
down 10 cents from Wednesday, while Platts 62% remained unchanged at $69.5/mt. Onshore
futures market was also stable on yesterday. Iron ore futures on the DCE remained rangebound
yesterday, with the most liquid May contract last trading at Yuan 480/dmt ($78.50/mt), down Yuan
3/dmt from Wednesday, and settling at Yuan 483/ dmt, up Yuan 2/dmt day on day. The rebar
futures market was mixed on Wednesday, with the most actively traded May contract in Shanghai
last trading at Yuan 2,566/mt ($419.60/mt), down Yuan 3/mt from Wednesday, and settling at Yuan
2,575/mt, up Yuan 19/mt. Tangshan billet remained unchanged at Yuan 2380/mt.
In spot market news. A 158,000 mt cargo of Carajas fines was heard traded at $77.50/dmt CFR
Qingdao on globalORE, arriving China in January. Vale sold to CNBM a shipment of 175,281 mt of
62.33% SSFG at $67.93/dmt CFR China on COREX, delivering January 10.
News
 Vale terminal inks iron ore deal with Qingdao port Seatrade-Global
 World’s Biggest Miner BHP Shifting Focus to Copper From Iron Ore Bloomberg
 Downward pressure on China's economy relatively big: Report The Economic Times

Indice
DSP
∆
∆%
High
Low
IO TSI 62% ($/dmt)
IO Platts 62% ($/dmt)
IO MB 58% ($/dmt)
IO DCE May (rmb/ton)
SHFEX REBAR
(rmb/ton)
SHFEX HRC (rmb/ton)
Tangshan Billet (rmb/ton)
68.80
69.50
57.45
483
-0.10
0.00
0.13
2.00
-0.15%
0.00%
0.23%
0.42%
139.7*
70
68.0*
69
491
479
2575
19.00
0.74%
2603
2551
2994
2380
6.00
0.00
0.20%
0.00%
3008
2990
(Platts/Reuters)
Country
*past 12 months
Previous
Forecasted
US
NOV Monthly Budget Statement
Indice / Event
-1217
-725
Actual
-568
Japan
OCT Machinery Orders MoM
2.9%
-2.4%
-6.4%
S.Korea
NOV Interest Rate Decision
Germany
NOV Inflation Rate YoY
France
NOV Inflation Rate YoY
0.55
0.4%
0.3%
US
Continuing Jobless Claim WoW
237.2
235.0
251.4
US
Initial Jobless Claim WoW
29.7
29.5
29.4
US
NOV Retail Sales MoM
0.5%
0.4%
0.7%
2%
2%
2%
0.6%
0.6%
0.6%
Page | 6
CommoditiesMorningExpress
Friday, December 12, 2014
Page | 7
Friday, December 12, 2014
What to Watch
CommoditiesMorningExpress
Economic Data – Week of Dec 08 – Dec 14
Country/Region
Japan
China
Germany
U.S.
Date
Dec 08
Dec 09
Dec 10
China
U.S.
Dec 11
Japan
Germany
Russia
U.S.
China
Eurozone
U.S.
Dec 12
Event
GDP Growth Rate QoQ Final
Imports YoY
Exports YoY
Balance of Trade
Industrial Output MoM
JOLTS Job Openings
Wholesale inventories MoM
API Weekly Crude Stocks
Inflation Rate CPI YoY
PPI YoY
New Yuan Loans
EIA Weekly Crude Stocks
Monthly Federal Budget
Machinery Orders MoM
Inflation CPI Final YoY
Interest Rate Decision
Initial Jobless Claims
Retail Sales MoM
EIA N Gas Stocks
Business Inventories MoM
Industrial Output YoY
Retail Sales YoY
Industrial Production YoY
PPI Final MoM
Core PPI Final MoM
Michigan Consumer Sentiment Prelim
Period
Q3 2014
Nov 2014
Nov 2014
Nov 2014
Oct 2014
Oct 2014
Oct 2014
w/o Nov 29, 2014
Nov 2014
Nov 2014
Nov 2014
w/o Nov 29, 2014
Nov 2014
Oct 2014
Nov 2014
Dec 2014
w/o Nov 30, 2014
Nov 2014
w/o Nov 29, 2014
Oct 2014
Nov 2014
Nov 2014
Oct 2014
Nov 2014
Nov 2014
Dec 2014
Prior
-1.90%
4.70%
11.60%
USD 45.41B
1.40%
4.74M
0.30%
1.60%
-2.20%
CNY 548.3B
USD -121.70B
2.90%
0.80%
9.50%
297K
0.30%
0.30%
7.70%
11.50%
0.60%
0.20%
0.40%
89.40
Forecast
-0.40%
3.90%
8.20%
USD 43.50B
-0.20%
4.82M
0.30%
1.60%
-2.40%
CNY 630.0B
USD -84.30B
-2.40%
0.60%
10.00%
277K
0.30%
0.30%
7.50%
11.50%
-0.15%
-0.10%
0.10%
89.10
Source
Tradingeconomics
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Tradingeconomics
Reuters Poll
Reuters Poll
Reuters Poll
Tradingeconomics
Tradingeconomics
Reuters Poll
Reuters Poll
Tradingeconomics
Tradingeconomics
Reuters Poll
Reuters Poll
Reuters Poll
Reuters Poll
Tradingeconomics
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
This material is not an official investment research nor a market analysis. It is produced by China Merchants Futures (HK) Co. Limited for information purposes only and only intended for the general information of
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not necessarily a guide to the future. The information contained in this material has been compiled from sources believed to be reliable by China Merchants Futures (HK) Co. Limited but China Merchants Futures (HK)
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China Merchants Futures (HK) Co., Limited (HKSFC CE No. AGO928)
Address: 48/F, One Exchange Square, Central, Hong Kong
Tel: +852 3189 6888
Fax: +852 2530 9168cfm Chuang Dai sold 850 plat at 1364 n sold 600 pall at
829.00
Precious Metals Team
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Tel: +852 3189 6330
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Page | 9