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Under the background of the downward pressure of the domestic economy and the escalation of Sino-US trade frictions, non-ferrous metals are mainly
weak oscillations.
From a fundamental point of view, due to the decline in global copper grade and rising mining costs, the growth rate of copper supply has slowed from a peak of 8% in 2013 to about
3% now.
The slowdown in supply growth does not mean that production is reduced, and global copper mine production is still growing
.
At present, the downstream demand for copper is mainly concentrated in traditional fields such as real estate, infrastructure, and power, and in the process of China's economic transformation, these traditional areas tend to be saturated with copper demand, while the development of emerging industries still takes time, such as the current copper consumption of the new energy vehicle industry chain only accounts for 1%
of the total copper demand.
The current copper market supply is loose, the macro is weak, the previous Shanghai copper upward is a phased rebound in the medium-term decline, with the end of the November stocking, this round of rebound is nearing the end
.
On the supply side, the current risk of global copper mine strikes is gradually lifting, and copper mine supply concerns have receded
.
From January to July 2018, Chile, the world's largest copper producer, produced 3.
31 million tons, an increase of 10.
8%
over the same period last year.
Global copper mine supply is generally loose, and the processing fee for imported copper ore in October was 92.
5 US dollars / ton, up 19 US dollars / ton from the beginning of this year, continuing the rally since the beginning of the year, confirming that copper mine supply is abundant
.
At the same time, domestic refined copper smelting capacity continued to expand, and the cumulative domestic refined copper output from January to September was 6.
506 million tons, an increase of 11.
7% year-on-year, still in a state
of growth.
Due to the current high processing fees of spot copper ore and the need for smelters to complete the annual production target at the end of the year, smelters will maintain a high operating rate, and it is expected that the cumulative output of refined copper from January to October may reach 7.
2376 million tons, an increase of 10.
6%
year-on-year.
In addition, from January to August 2018, China imported a total of 1.
58 million tons of copper scrap, down 35.
5%
year-on-year.
Since the beginning of this year, copper prices have shown a stepwise decline, and the price spread of refined scrap copper has gradually narrowed
.
After the import of copper scrap was restricted, the replacement consumption of copper scrap by refined copper increased, which is one of
the reasons for the decline in copper stocks.
After the holiday, the domestic copper spot premium fell back and turned into a
discount.
In terms of demand, since the beginning of this year, changes in demand have become the leading factor in copper prices, and the slowdown in copper mine supply growth and the gradual subsidence of overseas copper mine strikes are not the current hot
spots in the copper market.
In the period from mid-to-late September to mid-to-early October, copper prices rebounded sharply, mainly due to stronger spot markets and lower
inventories.
In the fourth quarter, real estate regulation will continue to tighten, home appliances, electronic information and other fields affected by trade frictions are difficult to improve, only infrastructure investment tends to relax, on the demand side may appear infrastructure alone support
.
In 2018, the State Grid plans to invest 498.
9 billion yuan, the growth rate of power grid investment in the first half of the year was -15.
1%, down nearly 25 percentage points from the same period last year, the completion amount was 203.
6 billion yuan, and the power grid investment in the second half of the year is expected to be 295.
3 billion yuan, an increase of 91.
7 billion yuan over the first half of the year.
In the second half of the year, the wire and cable field will make efforts, and the operating rate of wire and cable enterprises in September was 90%, up nearly 4 percentage points
from July.
In terms of stocks, as of mid-October, copper stocks in the previous period were 125,000 tons, down nearly 150,000 tons from the high level in June this year, and similar
to the inventory level in mid-October last year.
Stocks in the Shanghai Free Trade Zone stood at 421,000 tonnes, down 84,000 tonnes
from their high levels at the start of the year.
LME copper stocks stood at 161,000 tonnes, down nearly 190,000 tonnes
from their high levels at the start of the year.
At present, domestic and foreign copper stocks are at a relatively low historical level, which has produced some support
for copper prices.
Overall, the macro weak pattern has not changed, and terminal demand is difficult to improve in the short term, but the warming of domestic policies has boosted market sentiment and expectations
.
After the Fed raised interest rates to tighten liquidity, overseas market volatility intensified, risk appetite fell, and the current pulling effect of tax cuts and increased fiscal deficits on the US economy began to weaken
marginally.
If the US economic outlook weakens in the later period and gradually transmits to the commodity market with strong performance in the previous period, industrial metal prices may compensate for the decline
.
Combined with the loose supply pattern of the copper market, Shanghai copper is expected to restart the medium-term decline in the fourth quarter
.
