If copper demand improves, copper prices will be strongly supported

As of June 30, the Shanghai Copper Index fell by 2.
59% in the first half of 2019, but the amplitude reached 10.
60%.

Specifically, the Shanghai Copper Index continued to rise at the beginning of the year, reaching a yearly high of 50,740.
18 on March 4 and then opening a volatile downward mode, and fell to a yearly low of 45,878.
44 in early June; then showed signs of stabilization and recovery, with a slight rebound of 1.
79%
in June.

For the trend of the first half of the year, the factors affecting the futures price not only exist in the balance sheet and the supply and demand side, but also the capital and market sentiment increasingly affect the price fluctuation, and when the market sentiment is vented and the price falls excessively in the short term, the industrial supply and demand forces begin to appear, correct the overreaction of the market, and there is a rebound market
.

At present, Shanghai copper is ushering in multiple favorable factors
such as insufficient supply, rising demand, and improvement of the external macro environment.

In the long run, the trend of insufficient global refined copper supply is difficult to reverse
.
First, global mining investment slowed down due to lower metal prices, and the reduction of capital expenditure by large mining companies led to a slowdown in the commissioning of new projects; Secondly, at present, the global copper ore selection grade continues to decline, the global copper resource development and exploration is not ideal, and in the long run, there is a risk of insufficient global copper concentrate supply; Finally, the demand for copper for new energy vehicles will increase significantly, and the supply gap of refined copper will show a
trend of expansion.

The Fed is about to cut interest rates, and the dollar is likely to continue to come under pressure, which is positive for copper prices at the macro level
.

If the US economic growth slows down in the future and the Federal Reserve starts the process of cutting interest rates, the fall in the US dollar index will lead to a rebound in metal prices; At the same time, due to the worrying global economic outlook, if central banks start a new round of quantitative easing, it will be positive for metal prices
.
Based on this, Cinda Securities maintains a "bullish" rating on the non-ferrous metals industry, and recommends paying attention to "copper" with prominent long-term supply contradictions, "precious metals" that benefit from changes in the Fed's monetary policy, and "rare earths" that bring price fluctuations
due to policy changes.

As far as the copper market is concerned, it is expected that fundamentals will drive copper prices up, and it is recommended to pay attention to the investment opportunities
brought by the elasticity of mineral copper standards after the pressure of macro disturbances is eased.
According to WBMS data, global mine copper production from January to April 2019 was 6.
63 million tons, down 1%
year-on-year.
Qin Yuan said that the tight supply has led to the copper market to maintain a tight balance between supply and demand, once the late scrap copper and copper mine disturbance leads to a further reduction in supply, market demand is expected to turn, copper prices will break the current balance, there will be an
upward trend.

The next 6-12 months are very bullish on copper trends, as the current global copper supply is tight, and the total global copper inventory is estimated to be equivalent to 7.
2 days of global consumption
.
"2020 will really usher in structural undersupply
.
Guided by China's loose monetary policy and active stimulus policies, it will be positive
for commodity prices.
”