New Year's LME Copper Appears to Adjust After passing through several important time windows, such as the LME important delivery date, China's interest rate increase, and Christmas, LME copper continued its previous short-selling, but LME copper adjusted in the first trading day of 2011. The fall in copper futures was relatively large, and the gains were corrected. Correspondingly, the LME copper stocks continued to increase, increasing to 379250 tons as of January 5, 2011, an increase of approximately 30,000 tons from the 2010 lows; The monthly spread also fell from a peak of about 80 U.S. dollars to less than 20 U.S. dollars.
In fact, based on our fair value model, based on the current macroeconomic data, copper industry data, etc., the estimated fair value of LME copper in January was about 9200 to 9300. However, due to the recent listing of derivatives such as copper ETF, plus some speculations. Factors, objectively formed a forced market in December last year, which prompted copper prices to some extent deviated from the previous test model derived from the fair price range.
How will the copper market go? Is it the return of a reasonable price range or the formation of a new forced market, which is the key to our current tracking. Can you form a new forced market?
As stated in the previous report, after the LME copper exercise right was announced on January 5, the position structure and spread structure of the ** position can be used as the basis for the judgment.
Analysis of the contract position structure shows that two points are worth noting: First, there is a large short position in the spot month (before 19th), and its proportion of positions increased from 10% to 20% before December 30, 2010 to 20% to 30%. Second, in the contract period between February 17 and March 16, there was a short position that accounted for more than 40% of the total, which was formed since late December 2010. This is worthy of attention!
Analysis of warehouse receipt position structure shows that, starting from November 19, 2010, 50% to 80% of LME copper delivery spot warehouse receipts are concentrated in one seat, and the increase in warehouse receipt concentration is often accompanied by a relatively large fluctuation market; The delivery date corresponds to the data on the concentration of ** contract positions. It is very obvious that before December 9, 2010, the ratio of the highest concentration of seats is within the range of 50% to 80%, and that of the forced market during December 10th. On the 23rd, the degree of concentration was above 80%, once it reached 90% to 100%, but it fell back to 50% to 80% after December 24, even though this is still a very high level in history, to a certain extent Represents the operation of an open market.
Because the key to whether or not the squeeze market can occur is whether there is sufficient supply of goods in the empty market, the market outlook can pay close attention to the changes in the concentration of warehouse receipts and the concentration of positions on the delivery date to determine whether the new forced stock market will reappear. January 5, 2011 was the LME copper January option announcement date. Considering the official settlement price on January 5, the spread between spot and March ** contracted to about RMB 20/t, and LME stocks increased substantially. Reasons to pay close attention to the market outlook, then we found that LME copper contract position structure, in February after the continued increase in positions, so speculate the conclusions are as follows. Summary of Views 1. Currently, the form of the market for the formation of a new squeeze market is still complete; however, the key to whether or not a forced market is formed is whether there is enough spot delivery. As mentioned above, there are abnormal positions in the current position month and February position structure. Short positions need attention, so the market can focus on tracking the concentration of warehouse receipts and the concentration of contracts on the delivery date, as well as the changes in LME position structure data to determine the stage of the market trend.
2. LME copper inventories increased by approximately 30,000 tons, but the cancelled warehouse receipts also increased, and the combined inventory increased before and after Christmas. The U.S. library was the main, and the spot 3-month price spread narrowed, plus February 2011. After the LME copper contract prices and positions rose. Based on this, it can be guessed that the copper trading producer's selling period is equivalent to the disguised use of goods, and the gains on spreads are obtained. This may be a short-term operation of market makers or some companies with surplus goods, not necessarily It represents the actual existence of abundant copper, but the market needs to track some of the tracking indicators.
3. Currently, the LME copper price is operating at a high level. Although there is strong support from the perspective of increasing demand for economic recovery and the imbalance between the supply and demand of the copper industry, the current uncertainties are increasing. If it includes bonds and other fixed income markets, ** Markets, commodity markets, etc. are considered together and 2011 will be a very uncertain year. Judging from the current situation, the sovereign debt of the euro area will gradually come to maturity and face the problem of renewed corruption, which may lead to a chain effect. Therefore, from the perspective of business operations, we can only make periodic judgments based on the tracked economic and industrial data, and strive to grasp Medium and long-term trends, but this should be based on the continuous revision of economic data and important monitoring indicators, so rhythmic operations and constant revisions to the results of previous studies will be the norm. At least for now, LME copper still has conditions to form a forced market. Basic, but need to be cautious after the 18th, there may be periodic rest.
In fact, based on our fair value model, based on the current macroeconomic data, copper industry data, etc., the estimated fair value of LME copper in January was about 9200 to 9300. However, due to the recent listing of derivatives such as copper ETF, plus some speculations. Factors, objectively formed a forced market in December last year, which prompted copper prices to some extent deviated from the previous test model derived from the fair price range.
How will the copper market go? Is it the return of a reasonable price range or the formation of a new forced market, which is the key to our current tracking. Can you form a new forced market?
As stated in the previous report, after the LME copper exercise right was announced on January 5, the position structure and spread structure of the ** position can be used as the basis for the judgment.
Analysis of the contract position structure shows that two points are worth noting: First, there is a large short position in the spot month (before 19th), and its proportion of positions increased from 10% to 20% before December 30, 2010 to 20% to 30%. Second, in the contract period between February 17 and March 16, there was a short position that accounted for more than 40% of the total, which was formed since late December 2010. This is worthy of attention!
Analysis of warehouse receipt position structure shows that, starting from November 19, 2010, 50% to 80% of LME copper delivery spot warehouse receipts are concentrated in one seat, and the increase in warehouse receipt concentration is often accompanied by a relatively large fluctuation market; The delivery date corresponds to the data on the concentration of ** contract positions. It is very obvious that before December 9, 2010, the ratio of the highest concentration of seats is within the range of 50% to 80%, and that of the forced market during December 10th. On the 23rd, the degree of concentration was above 80%, once it reached 90% to 100%, but it fell back to 50% to 80% after December 24, even though this is still a very high level in history, to a certain extent Represents the operation of an open market.
Because the key to whether or not the squeeze market can occur is whether there is sufficient supply of goods in the empty market, the market outlook can pay close attention to the changes in the concentration of warehouse receipts and the concentration of positions on the delivery date to determine whether the new forced stock market will reappear. January 5, 2011 was the LME copper January option announcement date. Considering the official settlement price on January 5, the spread between spot and March ** contracted to about RMB 20/t, and LME stocks increased substantially. Reasons to pay close attention to the market outlook, then we found that LME copper contract position structure, in February after the continued increase in positions, so speculate the conclusions are as follows. Summary of Views 1. Currently, the form of the market for the formation of a new squeeze market is still complete; however, the key to whether or not a forced market is formed is whether there is enough spot delivery. As mentioned above, there are abnormal positions in the current position month and February position structure. Short positions need attention, so the market can focus on tracking the concentration of warehouse receipts and the concentration of contracts on the delivery date, as well as the changes in LME position structure data to determine the stage of the market trend.
2. LME copper inventories increased by approximately 30,000 tons, but the cancelled warehouse receipts also increased, and the combined inventory increased before and after Christmas. The U.S. library was the main, and the spot 3-month price spread narrowed, plus February 2011. After the LME copper contract prices and positions rose. Based on this, it can be guessed that the copper trading producer's selling period is equivalent to the disguised use of goods, and the gains on spreads are obtained. This may be a short-term operation of market makers or some companies with surplus goods, not necessarily It represents the actual existence of abundant copper, but the market needs to track some of the tracking indicators.
3. Currently, the LME copper price is operating at a high level. Although there is strong support from the perspective of increasing demand for economic recovery and the imbalance between the supply and demand of the copper industry, the current uncertainties are increasing. If it includes bonds and other fixed income markets, ** Markets, commodity markets, etc. are considered together and 2011 will be a very uncertain year. Judging from the current situation, the sovereign debt of the euro area will gradually come to maturity and face the problem of renewed corruption, which may lead to a chain effect. Therefore, from the perspective of business operations, we can only make periodic judgments based on the tracked economic and industrial data, and strive to grasp Medium and long-term trends, but this should be based on the continuous revision of economic data and important monitoring indicators, so rhythmic operations and constant revisions to the results of previous studies will be the norm. At least for now, LME copper still has conditions to form a forced market. Basic, but need to be cautious after the 18th, there may be periodic rest.
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