Copper demand in the fourth quarter off-season bearish forward copper prices

Recently, the most concerned overseas market is the impact
of the decline in US stocks on market confidence.
The direct trigger for the sharp fall in U.
S.
stocks is the escalating trade situation and geopolitical risks between the United States and China, and its core factor is the weakening of U.
S.
stock buybacks caused by the Fed's continuous interest rate hikes, and the 10-year bull market in U.
S.
stocks also contains huge adjustment pressure
.
If the Fed continues to tighten, then U.
S.
stocks are likely to follow
the global stock market peak.
Through the recent statements of the Federal Reserve and Trump, the Fed has slowed down the pace of tightening, Trump has expressed his statement to reduce the confrontation between China and the United States, and the current global capital market has eased
in stages.

Refined copper imports increased, and domestic production far exceeded expectations
.
According to Wind data, refined copper production from January to September was 6.
607 million tons, a cumulative increase of 11.
2% year-on-year, and September output was 764,000 tons, an increase of 1.
87%
month-on-month.
In terms of imports, due to the continuous opening of the import window in August and September and the continuous arrival in October, the net import of unforged copper and copper products from January to September was 3.
381 million tons, an increase of 19.
2% year-on-year, and the import in September was 453,000 tons, a sharp increase of nearly 100,000 tons
month-on-month.
According to statistics, 2.
25 million tons of production capacity are planned to be put into operation in 2018, and 1.
8 million tons have been put into operation, and the new production capacity far exceeds market expectations
.
From the perspective of the company's production and production cycle, domestic production will increase
significantly from November.

According to customs data, the import volume of copper scrap from January to September was 1.
78 million tons, a sharp decrease of 36% year-on-year, but the copper content of copper scrap increased significantly, and the actual copper content of scrap copper content decreased much less than the physical reduction ratio
.
Affected by the policy, the supply of copper scrap has decreased and the price difference of refined scrap in the early stage is too low, so that refined copper replaces copper scrap consumption
.
Since October, the domestic supply and demand pattern has changed, domestic copper has increased sharply month-on-month, and the price difference of refined copper scrap has widened to more than 1700 yuan / ton, resulting in the economic benefits of copper scrap, rising demand to inhibit refined copper consumption, spot goods weakened significantly, inventory accumulation, and huge import inversion
.
Domestic production is expected to increase in November, and the price spread of refined copper scrap will narrow
against the backdrop of insufficient demand.

Grid investment is the only bright spot
in downstream consumption.
Since October, downstream consumption has slowed down significantly, with double-digit negative growth
in automobiles and air conditioners.
In addition, overseas orders are decreasing, and for copper consumption, increased investment in the grid is the only bright spot
at present.
In the first three quarters of this year, the copper cable industry performed brightly, and the operating rate of enterprises has maintained a growth trend
.
According to statistics, the overall operating rate of wire and cable enterprises nationwide in September was as high as 88.
85%, in addition, the investment in power grid capital construction in September was 57 billion yuan, an increase of 25% month-on-month, and the growth rate increased
significantly.
At present, infrastructure projects in various places are rushing to launch, infrastructure support economic intentions are obvious, from the State Grid project to expand cable demand, support copper consumption
.

The high growth rate of real estate investment does not reflect the warming of the market, and there is no sign
of easing at the policy level.
From January to September, the cumulative sales area of commercial housing increased by 2.
9%, while the completion of real estate development increased by 9.
9%
year-on-year.
Under the background of the decline in the growth rate of industrial production and fixed asset investment, the cumulative growth rate of real estate investment in China remains high, and it is worth paying attention
to behind the data.
At present, the statistics of real estate investment include two parts, one is construction and installation investment, and the other is land acquisition fee
.
The land acquisition fee is included in real estate investment in installments according to the actual payment amount, which is a relatively lagging indicator
.
The higher growth rate of land acquisition fees this year is the main force driving the overall growth rate of real estate investment, and does not reflect the warming
of market investment.
At present, there is no sign of loosening at the policy level, and stable growth in the fourth quarter will land on infrastructure
.

To sum up, Shanghai copper still has room to fall, and there will be a yearly low in the fourth quarter
.