March 2021 cable raw materials (copper) monthly report

First, the macro aspect

International aspect,

1.
United Nations Conference on Trade and Development (UNCTAD): The global economy will grow by 4.
7% in 2021 due to the strong recovery in the United States, compared with the previous forecast of 4.
3%.

In the United States, full-year GDP growth is expected to recover by 4.
5%
under the new round of fiscal stimulus.

2.
Japan's total exports in February were about 6.
03 trillion yen, or about $55 billion, down 4.
5% from the same period last year, mainly due to weak exports to the US and European markets
.
Imports rose 11.
8% year-on-year in February, turning positive for the first time in 22 months
.

3.
Eurozone preliminary manufacturing PMI for March: 57.
9 prior, 57.
7 expected, 62.
4
announced.
The eurozone economy beat expectations in March, mainly due to a record surge in manufacturing output; But services remain the weak link
in the economy.

4.
The preliminary Markit manufacturing PMI in March was 59, the expected value was 59.
3, and the previous value was 58.
6
.
U.
S.
manufacturing picked up
slightly in early March, amid strong growth in new orders.

Domestically,

1.
According to data from the National Bureau of Statistics, from January to February, the added value of industries above designated size in the country increased by 35.
1% year-on-year, an increase of 16.
9% over January-February 2019, and an average growth of 8.
1% in two years, which was a high level
in the same period in recent years.
The growth of industrial production accelerated, and the growth of equipment manufacturing and high-tech manufacturing was good
.

2.
According to data from the National Bureau of Statistics, from January to February, the total retail sales of consumer goods were 6,973.
7 billion yuan, a year-on-year increase of 33.
8%, an increase of 6.
4% over January to February 2019, and an average growth of 3.
2%
in two years.
Market sales maintained growth, and sales of consumption upgrade goods grew rapidly
.

3.
According to data from the National Bureau of Statistics, the profits of industrial enterprises accelerated in January and February, and the total profits of industrial enterprises above designated size in the country increased by 1.
79 times year-on-year, an increase of 72.
1% over January-February 2019, and an average increase of 31.
2%
in two years.

4.
According to data from the National Bureau of Statistics, after the Spring Festival, enterprise production accelerated recovery, and China's manufacturing purchasing managers' index (PMI) in March was 51.
9%, 1.
3 percentage points higher than the previous month, and the manufacturing boom rebounded
.

Second, the market review

This month, copper prices slipped from the 70,000 high, fell into a volatile market, and carried out a month-long high finishing, and the main force of Shanghai copper fluctuated in the range of 65,000-68,000, with a monthly decline of 5.
13% or 3,550 points
.
The global epidemic control is acceptable, inflation expectations have driven the high valuation of copper prices, although the loose monetary policy and infrastructure investment in the United States have continued, but the market speculation has dissipated, the price has further moved closer to the fundamentals, and Shanghai copper has slipped from a high level into consolidation, and the momentum is weak
.

In terms of the market, spot copper fell by 3310 yuan this month, the premium first rose and then fell, and the good copper at the end of the month maintained a discount of around
80 yuan.
At the beginning of the month, the plate fell from a high of 70,000, the downstream wait-and-see mood was heavy, the previous order due to the soaring price of raw materials, processing fees are difficult to maintain operations, consumption willingness is not high, as the plate gradually stabilizes, trading has signs of improvement, but the overall can not meet the peak season expectations, and as the plate continues to test below 66,000, basically to bargain hunting into the market, until the end of the month, the market confidence in the market has a relatively good improvement
.
At present, the price difference is large in the next month, and the premium is expected to continue to rise
.
In terms of import profit and loss, the US index rebounded at a low level, domestic consumption performed poorly, the import window was closed, and the gap narrowed from 900 yuan / ton at the end of last month to 400 yuan / ton
now.

There are two main factors for the correction of copper prices, one is that inflation expectations have risen sharply, the market expects monetary policy to tighten ahead of schedule, and "high-valuation" risk assets such as stock markets and non-ferrous metal futures have been sold off, and triggered the realization of bull profits in the previous round of rise, and the favor of funds has declined, coupled with the epidemic rebound, the dollar bottomed out and rebounded to put pressure, and macro bearish news is frequent; Second, the downstream consumption in the traditional peak season has not shown obvious signs of recovery, expectations have been falsified, the spot market discount situation continues, and the previous period continues to accumulate, hitting market confidence
.
However, the rebound in early April, the subsequent supply and demand contradiction still exists, copper prices are still expected to run strongly in April, and the 65,000 below continue to build a bottom is more conducive to the short-term sharp pull
of copper prices.

3.
Waste market

This month's copper price fluctuated in a wide range, fluctuating around 67,500 yuan / ton, and the current Shanghai copper 2104 contract fell at 66,950 yuan / ton
.
Spot copper fell 2900 yuan / ton compared with the end of last month, scrap copper fell 1000 yuan / ton, and Foshan high-quality bright copper reported 59600 yuan / ton
.
The fine waste difference is around
2800.

This month's copper fluctuations affect the scrap copper trade, the scrap copper market price is chaotic, the price difference at all levels is obvious, and it is difficult
for traders to replenish stocks.
Shandong Linyi Metal City has recently raised prices, using futures hedging to reduce the loss of market fluctuations, but the supply is still not much
.
The market situation in Suzhou, Miluo and other places is similar, and the market trading atmosphere is average
.

The market fluctuates greatly, the downstream cable orders are not good, the market bright copper rod compared with the spot copper price discount is close to 2,000 yuan per ton at most, Guangdong, Jiangxi some manufacturers are restricted from opening furnaces, but the raw material inventory is high, and the demand for receiving goods is not high
.
It is reported that a copper factory in Henan has started construction of a new factory in Jiangsu, attracting Linyi supplies; Miluo market merchants reported that the competition for local counterparts to raise prices has been fierce recently, and some purchases are even higher than copper mills
.

4.
Trend forecast

Recently, affected by the continuous rise of the US dollar, the base metal is generally weak, suppressing copper prices
.
At present, it is approaching the peak season of traditional copper demand in China, carbon neutrality and green energy bring expected consumption under the relaxed pattern, while the supply side considers the low price ratio and the concentration of refinery maintenance in the second quarter, the increase in refined copper supply is limited, and the expectation of gradual destocking remains unchanged
.
In general, downstream investment demand is weak, and consumer demand performance is acceptable
.
In the medium term, Shanghai copper maintains its preference outlook, and prices may be high
in April-June.
During the month, we will pay attention to the early tightening of currencies in various countries and changes
in government bond interest rates.
It is expected that next month, Shanghai copper will stabilize and rebound, pay attention to the range shock before breaking through
.

5.
Industry news

1.
Los Pelambres copper miners in Chile, a subsidiary of Chile's Antofagasta, one of the world's largest copper producers, voted Tuesday to reject the company's latest contract proposal, paving the way
for a strike.
Local law requires a period of government-brokered mediation
.

2.
Peru's copper production could reach a record 2.
5 million mt in 2021, up from 2.
15 million mt
last year, according to Peru's Minister of Energy and Mines.
Recent copper mine expansions will help boost production in the country, with Minsur's $1.
6 billion Minas Justa project set to start in April or May
.

Chile's national copper company, Codelco, the world's largest copper producer, said it had obtained approval from regional environmental regulators to extend the useful life of its Radomiro Tomic mine until 2030, an important part of
Chile's major plan to maintain production.

4.
Freeport-McMoRan will sign a $2.
8 billion deal with China's Tsingshan Holding Group on March 31 to build a copper smelter
in Indonesia's Weda Bay, a senior minister said.

Ivanhoe Mines is considering accelerating the third phase of the concentrator expansion of its Kamoa-Kakula project in the Democratic Republic of
Congo.
The second phase of production has been brought forward to the third quarter
of 2022.
The second phase of the project will increase copper production to 400,000 tonnes per year
.

6.
Rio Tinto and Mongolia have reached a new agreement
to expand the Oyu Tolgoi copper-gold mine in the Gobi Desert.
Underground expansion is its most important growth project, and when completed, the mine will produce 480,000 tonnes of copper
per year from 2028 to 2036.

7.
Reuters, an executive at Peru's Southern Copper, which is pushing ahead with the development of the $5.
4 billion Chancas and Michiquillay projects as Chinese demand and limited supply help drive global copper prices higher
.