January 2021 cable raw materials (copper) monthly report

First, the macro aspect

International aspect,

January, December US retail sales fell 0.
7% m/m versus 0% expected, revised down to -1.
4% in the previous month, and core retail sales fell the most in eight months
.
For the full year 2020, unadjusted retail sales grew just 0.
6% sequentially, the lowest
in 11 years since 2009.
Real-time data showed that consumer spending remained weak at the start of the year, and the market focused on a new round of fiscal stimulus
.

2.
U.
S.
gross domestic product contracted 3.
5% in 2020, the first decline since 2009 and the worst contraction since 1946, with the pandemic reducing
consumer spending and business investment.

3.
Germany's GDP growth for the whole year of 2020 recorded -5%, the lowest since 2009, better than the expected contraction of 5.
1%.

Strong national responses have helped limit the disruption
caused by the pandemic to Europe's largest economy.

4.
Eurozone manufacturing PMI final value for December 55.
2, expected 55.
5, preliminary value 55.
5
.
As restrictions in response to the pandemic tightened, the solid performance of the manufacturing sector contrasted with the lockdown earlier this year, with factories becoming a key support
for the economy.

Domestically,

1.
In 2020, the total profit of industrial enterprises above designated size in the country will be 6.
45161 billion yuan, an increase of 4.
1%
over the previous year.
In December 2020, industrial enterprises above designated size achieved a total profit of 707.
11 billion yuan, a year-on-year increase of 20.
1%, and the growth rate was 4.
6 percentage points
faster than that in November.

2.
According to the report of the United Nations Conference on Trade and Development, the total amount of global foreign direct investment (FDI) fell sharply in 2020, but China's FDI bucked the trend and increased by 4% to US$163 billion, and China surpassed the United States to become the world's largest foreign capital inflower
.

3.
According to data from the National Bureau of Statistics, in December 2020, the CPI turned from a decline to a year-on-year increase, and the month-on-month increase in PPI expanded and the year-on-year decline narrowed
.
Household consumption demand continued to grow, and domestic demand recovered
steadily.

4.
According to data from the General Administration of Customs, foreign trade imports and exports have achieved positive growth for seven consecutive months, the total value of import and export and export has reached a record high, and the international market share has also reached the best record in history, becoming the only major economy
in the world to achieve positive growth in goods trade.

Second, the market review

In January, Shanghai copper rushed back down, and the main Shanghai copper 2102 contract closed at 57550 points, down 0.
35% or 200 points
.
Approaching the Lunar New Year, copper consumption is difficult to push prices back to a high level, Biden took office to announce the announcement of a $1.
9 trillion stimulus plan, but due to the aggravation of the epidemic and other reasons, the market expects limited policy promotion, and the US GDP in 2020 hit a multi-year low once hit market confidence
.

But in the follow-up, the market generally expects that the domestic Spring Festival still has economic recovery performance, coupled with the US loose currency pattern remains unchanged, green energy and copper mine supply is tight and other multiple supply and demand tensions, the copper market still has a strong outlook, it is expected that next month after the bottom of the stabilization or there is a strong performance, it is worth noting that during the Spring Festival, the external market or in advance of the domestic economic recovery and other expectations reflected on the plate, pay attention to the further performance
of copper prices after the pullback.

In terms of the market, spot copper rose by 230 yuan this month, the premium first rose and then fell, and the good copper at the end of the month remained around
150 yuan.
In the first half of the month, the market continued to rise, the market stopped at a high level, and with the decline of the plate, the rise and discount recovered, but the overall trading was restricted by the off-season; However, it is understood that the smelter has also stopped production and maintenance, resulting in weak market supply and demand, and at the end of the month, the buying Yu is deserted
.
In terms of import profit and loss, Yellen was elected as the US Treasury Secretary, clearly will not seek the weakness of the US dollar, the US index has stabilized the bottom, copper prices are strong inside and weak, although the import window remains closed, but the gap at the end of the month is only around 80 yuan / ton
.

3.
Waste market

This month's spot copper rose 230 yuan / ton compared with the end of last month, scrap copper fell 500 yuan / ton, and Foshan high-quality bright copper reported 51400 yuan / ton
.
The difference between fine scrap and scrap is about 3500, and the price advantage of scrap copper raw materials is still obvious
.

The market fluctuated at a high level, and waste production enterprises concentrated on cleaning up inventory at the end of the year, and the supply of market supplies increased, and it was difficult for the scrap copper market to get rid of the price pressure situation at the end of the year
.
As the year draws to a close, traders in Suzhou, Miluo, Ningbo and other places are worried about the epidemic and logistics stoppages, and large cargo merchants have recently actively cleaned up inventory
.
It is reported that some people going out in Hebei have taken a holiday in advance, and due to concerns about copper prices in the next year, many merchants have reported that they will deliberately control lower positions or use futures to hedge at
the end of this year.
Due to the epidemic and the large amount of inventory accumulated in the early stage, some manufacturers in Hubei have extended the payment account period and suspended quotations, and there is news that it will return to normal
years ago.

Regarding the import of scrap copper, since no approval is currently required, the import source has increased significantly in recent months, and the goods can be declared
in advance for customs clearance at the port.
Some copper rod enterprises in the market have begun to contact the import sources
of new standards.
According to the latest released data, the import volume of copper scrap and crush in December 2020 was 116,700 tons, an increase of 63.
4%
over the same period last year.
From January to December 2020, the cumulative import of copper scrap and crush was 944,300 tons, down 36.
89%
year-on-year.
With the implementation of the new policy on scrap copper imports, copper scrap imports have been flat in November, while copper scrap imports in December increased
sharply year-on-year.

4.
Trend forecast

Shanghai copper rushed back down this month, copper consumption is difficult to push prices back to a high level near the end of the year, and the price momentum has further shifted to the US index and macro news, and copper prices have been weak
in the past.
Overall, China's national investment growth rate will gradually pick up in 2020, investment in key areas such as infrastructure, manufacturing, and real estate development will continue to improve, and huge domestic and foreign demand will help the economy continue to grow
.
The automotive industry in the end market is showing a growth trend, and the accelerated development of the new energy vehicle industry will drive demand growth; Short-term copper concentrate maintains a tight pattern, inventories are generally at a low level, but domestic consumption is seasonally weakening, and the downstream holiday before the holiday is gradually opening, and short-term copper prices are expected to continue to fluctuate
.

5.
Industry news

1
.
Chile's national copper company (Codelco) approved a $1.
24 billion investment to expand production at its underground mine in Teniente, in the O'Higgins region.
Two weeks ago, Codelco also approved the Inca open-pit mining project
at the El Salvador copper mine in the Atacama region.

MMG's copper concentrate production fell by 18.
6% last year, mainly due to labor shortages
at the Las Bambas mine in Peru during the Covid-19 pandemic.
The company produced 312,557 tonnes of copper concentrate and 72,007 tonnes of copper cathode in
2020.

Glencore has agreed to sell its stake in the Mopani Copper mine to Zambian mining investment arm ZCCM-IH for US$1.
5 billion in advance for just US$
1.
Upon completion of the transaction, the Mopani Copper Mine will be repaid
through future sales and profits.

4.
Chilean mining company Antofagasta revealed that its expansion project in Los Pelambres in its country will cost $1.
7 billion, up from an initial estimate of $1.
3 billion, mainly due to the value of modifying marine engineering and expanding desalination plants
.
Once fully operational, it will increase Antofagasta's total production by 60,000 tonnes of copper
per year.

5.
The development of the Kamoa-Kakula copper mine under Zijin Mining has reached a perfect end in 2020, and the surface yard of the Kakula copper mine project has reserved about 1.
52 million tons of high-grade and medium-grade ore with a copper grade of about 4.
03%, laying a solid foundation
for the project to be put into operation on schedule in July 2021 and achieve rapid ramp-up of production capacity.

6.
The Chilean National Mining Company (Codelco) has approved a US$1.
383 billion renovation and expansion of its Salvador mine, which will start
in the first half of 2021.
The program will extend the productive life of aging mines by 40 years and increase production by 30%.