November 2020 cable raw materials (copper) monthly report

First, the macro aspect

International aspect,

1.
The OECD has lowered its global growth forecast for 2021, which lowered its global growth forecast for 2021 to 4.
2%
from a 5% increase in September.
The downward revision for the eurozone and the UK has been particularly large: the growth forecast for the UK has been lowered to 4.
2% from the previous 7.
6%; The growth forecast for the United States was lowered to 3.
2%
from 4%.

2.
The Fourth Regional Comprehensive Economic Partnership (RCEP) Leaders' Meeting was held on November 15, and the 10 ASEAN countries and 15 countries including China, Japan, South Korea, Australia and New Zealand officially signed the Regional Comprehensive Economic Partnership (RCEP), marking the formal conclusion
of the world's largest free trade agreement.
The signing of RCEP is an important step for regional countries to safeguard the multilateral trading system and build an open world economy with practical actions, and is of symbolic significance
for deepening regional economic integration and stabilizing the global economy.

3.
The preliminary Markit manufacturing PMI in the United States rose to 56.
7 in November, the highest since
September 2014.
Business activity in both manufacturing and services reached their highest levels since March 2015 in November, with the economic upturn reflecting further strengthening
in demand.

4.
Eurozone manufacturing PMI preliminary reading for November was 53.
6, 54.
8 prior, 53.
1
expected.
German manufacturing continues to grow strongly, making the preliminary Eurozone manufacturing PMI for November significantly higher than the previous median market
expectation.

Domestically,

In January, China's manufacturing purchasing managers' index (PMI) was 52.
1%, up 0.
7 percentage points from the previous month, and it was above the critical point for nine consecutive months, indicating that the recovery growth of the manufacturing industry has accelerated
.
From the perspective of enterprise scale, the PMI of large, medium and small enterprises was 53.
0%, 52.
0% and 50.
1%, up 0.
4, 1.
4 and 0.
7 percentage points respectively from the previous month, all above the critical point
.

2.
China's Caixin manufacturing PMI in November was 54.
9, the highest value since December 2010, expected to be 53.
5 and 53.
6
previously.
Economic recovery continued to accelerate after the pandemic, with China's manufacturing sector improving
in November the strongest in a decade.

3.
According to the National Bureau of Statistics, from January to October, the profit of the equipment manufacturing industry increased by 9.
6% year-on-year, the growth rate was 0.
8 percentage points faster than that from January to September, and the profit of industries above designated size increased by 3.
2 percentage points year-on-year, which is the sector that contributed the most to the growth of industrial profits
.
Among them, the electronics industry has maintained double-digit growth since the cumulative profit growth rate turned positive in April, with an increase of 12.
6% from January to October, and its contribution to industrial profit growth is particularly prominent
.
The profit of the automobile manufacturing industry recovered steadily, and the profit growth rate from January to October increased by 6.
6%, which was 3.
6 percentage points
faster than that from January to September.

4.
According to data from the National Bureau of Statistics, from January to October, the total profit of industrial enterprises above designated size in the country increased by 0.
7% year-on-year, and fell by 2.
4%
from January to September.
The cumulative profit growth of industrial enterprises has turned from negative to positive, and the relationship between market supply and demand has been improving
day by day.

Second, the market review

In November, copper prices continued to rise sharply, hitting the best monthly performance in 4 years, of which the London copper brush reached a new high in 7 years, up 12.
71% or $853, and the main force of Shanghai copper rose 13.
23% or 6740 yuan
.
The main force of Shanghai copper is in a moderate rebound, and the rally is more stable; After the short-term violent rise, it attracted bulls to take profits, and the risk of pullback consolidation increased, but the center of gravity of copper prices in the later period is expected to maintain an upward shift
.

On the macro front, the US election at the beginning of the month ended with Biden's victory, uncertainties cooled, and the market expected that Sino-US trade relations would not be worse; The landing of RCEP, the progress of Pfizer and other vaccines is frequently positive, there are signs of relaxation of epidemic control in Europe, the manufacturing data of various countries is eye-catching, and market risk appetite is heating up; And the global loose monetary policy continued, the dollar index broke downward, and commodities led by copper were hotly welcomed by funds, and there was upward momentum
.
Fundamental review, the Bureau of Statistics released data show that the growth rate of infrastructure investment accelerated in October, unwrought copper and copper imports increased by 43.
4% year-on-year, while the inventory in the previous period fell below 100,000 tons, and there were signs
of recovery on the downstream consumer side under the growth of automobile production and sales and the expectation of the power grid rush period.

In terms of the market, spot copper rose by 6,010 yuan in November, the high level of the premium remained stable, and the good copper premium remained around
180 yuan at the end of the month.
As the market rose all the way, the market once stopped and watched, and the downstream stocked goods on demand, and the fear of heights was heavier
.
However, due to the decline in inventory and optimism about the future market, the willingness of holders to raise prices has been very strong, and the lowest copper premium is 150 yuan, and the overall trading has no obvious signs
of improvement compared with last month.
In terms of import profit and loss, the window reopened after the 17th, intermittently maintained for about a week, and the highest was close to 120 yuan / ton
.
The US dollar fell below the 92 key support level, the renminbi rally slowed slightly, and copper prices improved slightly on the outside and weakened internally
.

3.
Waste market

Copper prices have soared all the way, spot copper rose 6,000 yuan / ton, scrap copper soared 5,000 yuan / ton, the highest level
since 2013.
Foshan area high-quality bright copper reported 52,000 yuan / ton
.
The fine waste spread widened to about
2200.

Copper prices have risen sharply this month, with strong highs and climbing all the way
.
Under the prospect that domestic scrap copper sources have been in short supply, copper is at a high level, and the willingness of merchants to ship has increased, and they have actively realized multiple rounds of trade
.
Downstream scrap copper enterprises have also actively entered the WTO to grab goods, and the receipt of materials this month has increased significantly, and the inventory of scrap copper on the site has increased
greatly compared with the previous month.
Because copper prices have been refreshingly high, scrap copper quotations on the market are chaotic, and there are also big differences
between the north and south regions.
According to the feedback of some enterprises, due to the rapid rise in copper prices, downstream orders due to high prices, frequent price adjustments and other problems, the transaction volume is average
.

4.
Trend forecast

Shanghai copper rose by more than 6,000 yuan this month, and with the landing of the RCEP agreement within the month, it further broke the shock range maintained for half a year, bringing a new high
in Shanghai copper prices in recent years.
In terms of the logic of Shanghai copper prices this month, the US election has brought about the fading of risk aversion, and inflation concerns brought about by the expected economic recovery and loose monetary policy with the launch of vaccines, guiding funds into the copper market to form a secondary impetus and hit new highs
in recent years.
Considering that the current copper market enthusiasm has further returned to stability, the market follow-up funds and economic recovery expectations have weakened, and the subsequent Shanghai copper power may still return to the fundamental consumer guidance
.
At present, under the stage of annual increase of 40% in domestic copper imports year-on-year, copper inventories in the previous period still maintain the low level in recent years, bringing favorable expectations for the delayed release of China's demand side, and medium-term upward in fundamentals
.
On this basis, it is predicted that after the short-term shock adjustment of Shanghai copper next month, there may still be a moderate and strong trend
in the future.

5.
Industry news

1.
At present, the Yulong copper mine reconstruction and expansion project of Western Mining Group has entered the final stage, and is expected to be completed and put into operation in mid-December, with an annual output of about 100,000 tons of copper concentrate (metal content) and 5,800 tons of molybdenum concentrate (metal content), which can generate profits of about
2 billion yuan.

Ivanhoe Mines announced that the Kamoa-Kakula copper project in the Democratic Republic of Congo reached a monthly high
of 2,172 meters of underground development in October.
This result brings the total underground development mileage to 24.
7 kilometers, about 7.
9 kilometers
ahead of schedule.

3.
Recently, Codelco, the world's largest copper producer, Chile's national copper industry, decided to extend the mining period of the Chuquicamata copper mine for one year
.
The mine produced a total of 299,700 tonnes of copper in the first nine months
of this year.

4.
Ivanhoe Mines' Kakula copper mine in the Democratic Republic of Congo (DRC) is more than 58% complete, and the first concentrate starting with an initial 3.
8 million tonne per year (Mtpa) concentrator will come on stream in July 2021
.

5.
Codelco, Chile's national copper company, the world's largest copper miner, said it was seeking talks
with Ecuador due to its failure to meet a 2019 agreement to jointly develop Ecuador's Llurimagua copper project.

6.
Recently, Zijin Mining Congo (Kinshasa) Kamoa-Kakula Copper Mine obtained US$420 million in project-level financing, with a significant increase in cash flow, and the second sequence of the project was officially launched at full speed, and the completion time is expected to be significantly advanced from the first quarter of 2023 to the third quarter
of 2022.