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Trade Service
First, the macro aspect
First, the macro aspectDomestically,
Macro data is still not performing well, the Bureau of Statistics announced on October 19 that China's GDP in the third quarter increased by 6.
5% year-on-year, less than expected in the previous value, reaching the low level
after the 2008 financial crisis.
On October 31, it was announced that China's official manufacturing PMI in October was 50.
2, falling for the fifth consecutive month, and almost holding the boom and bust line
.
As the external trade problems are gradually prominent, the internal economic growth is facing downward pressure, and the situation in the fourth quarter is not optimistic
.
In terms of the Sino-US trade war, China's Ministry of Foreign Affairs said at the end of the month that during the upcoming G20 summit in the Argentine capital on November 30, the heads of state of China and the United States will hold consultations
on trade.
International aspect,
With the euro trend remaining weak since Italy and the EU at the end of September because of the contradiction caused by the budget, Eurostat announced at 6 pm Beijing time on October 30 that the Eurozone's GDP in the third quarter was lower than expected and the previous value, and due to Italy's economic growth in the third quarter, it also unexpectedly slowed
down.
The market expects that the EU may once again reject Italy's redrafted budget plan
.
The economic downturn is stimulated by internal contradictions, and the short-term weakness of the euro continues
.
In contrast, the pound has improved recently
.
Brexit Secretary Raab said on October 30 that a withdrawal agreement
is expected by November 21.
The news caused the pound to climb sharply on the day, focusing on the impact
of subsequent events on the dollar.
Second, the market review
Second, the market review
Copper prices have fluctuated greatly in recent days, and copper prices have continued to fall
if Trump said that if he does not negotiate improper trade issues with China during the G20 summit, tariffs will be imposed on all imports from China.
Coupled with the release of PMI data for October on the 31st, it was significantly lower than expected, and the pressure of China's economic growth slowdown continued, while compared with the US data, it was stronger, and the dollar once rose above
97.
The center of gravity of copper prices continued to move downward, falling below the 49,000 support
.
In the phone call between the two heads of state, the market's expectations for the easing of the trade war increased sharply, and Shanghai copper quickly closed around
50,000.
With the continuous decline in copper prices, merchants began to raise prices, and good copper turned from discount to premium, but because most merchants are still pessimistic about the future market, the willingness to raise prices is not strong, around 30 yuan
.
However, downstream manufacturers still do not enter the market to take many
goods.
After the opening of the profit window for copper imports last month, many imported copper flowed into China, and the market source flowed into inventory, and the inventory in the previous period has increased
.
3.
Waste market
Waste market
This month's copper price showed a narrow downward trend, Shanghai copper mainly runs in the range of 48500-51000 yuan / ton, up to now the mainstream bright copper price in the market is 44000-44300 yuan / ton
.
The refined waste price spread has also widened to more than 1,000 yuan, and the market demand has also been replaced by refined copper scrap, which has also eased the pressure on refined copper supply to a certain extent
.
In October, copper prices remained low and volatile, without significant improvement, and repeatedly failed to soar
.
Therefore, the enthusiasm of scrap copper merchants was hit, and the later trend was gradually pessimistic, and the bearish sentiment heated up
.
The loss of goods in hand continues to increase, forced to wait and see, waiting for the opportunity to rebound shipments, and the overall market supply is still in a tight state
.
Although it is in the traditional consumption season, downstream demand has also rebounded, but copper manufacturers for the future market is also not confident enough, dare not stock a large number of goods, the enthusiasm to enter the market is not too high, basically just need to purchase, inventory is only maintained for about 1-2 weeks at most
.
The phenomenon of market price reduction and receipt has not been greatly improved, and the willingness to follow the decline rather than rise is strong, and the situation of market supply and demand still exists
.
4.
Trend forecast
Trend forecast
The downward pressure on the economy has become increasingly severe, and copper prices in October failed to extend the rebound
in September due to multiple negative factors.
The inventories of the three major exchanges remained at low levels during the year, but the sustained benefits were weakened; At the same time, due to the poor economic data of the European Union and the exchange rate fluctuations caused by the Brexit deadline, the weakness of non-US currencies supported the recent increase in volatility of the US dollar, and continued to pay attention to the impact
of international events on the US dollar in November.
The lukewarm October of the Sino-US trade war has passed, and with the G20 summit approaching, the United States and China will communicate at the highest level, which will still have a huge impact
on financial markets.
The copper price in October peak season is not strong, mainly due to the market's concern about the future downstream demand side caused by the economic downturn; At the same time, as non-US currencies continue to weaken, the US dollar will continue to limit the magnitude of copper price rebound; On the positive side, the Sino-US trade war will again hold heavyweight consultations, and the market pessimism will ease, but due to the undetermined situation and the recent fundamental changes are not much, copper price trend is expected to change significantly, November is expected to be a wide range of volatility, London copper operating range of 6,000-6,300 US dollars, Shanghai copper 4.
85-51,000, scrap copper 4.
34-44,800.
5.
Industry news
Industry news
1.
Vale is expected to approve a $1 billion expansion plan for Brazil's copper mine later this month
, according to a person familiar with the matter.
The construction of the Salobo mine, known as the Salobo Phase III project, could take about three years to complete and add about 50,000 tonnes of capacity
.
Salobo currently produces about 200,000 tons
of copper per year.
Global copper inventories are falling as the world's largest iron ore producer plans to invest in new copper projects, while there is growing consensus that there will be a shortage
in the copper market next year.
The chairman of Chile's state-owned company Codelco said that China's demand for copper has been so strong in the past few months that Codelco has almost sold out
next year's copper supply ahead of schedule.
With limited copper supplies and declining global inventories, mining companies and investors are increasingly confident in copper
.
Codelco has signed contracts with some European buyers for the supply of copper cathodes, with a premium of $98/mt, the highest level
since 2015.
Contract premiums for Chinese and U.
S.
customers have also risen 15 to 17 percent
this year.
Chilean state-owned miner Codelco submitted an Environmental Impact Assessment (EIA) for a project that will extend the productive life of its aging Salvador mine by 40 years and increase production by 30%.
Codelco is the world's largest producer of copper
mines.
The project, called Rajo Inca, will convert an existing mine that has been operating since 1959 from an underground mine to an open-pit mine
.
4.
A senior official at Indonesia's state-owned mining company Inalum said it was seeking to finalize a majority stake transfer agreement
in Freeport Indonesia's company in December.
The agreement will allow Indonesia's state-owned Inalum to increase its stake to 51.
23 percent from the current 9 percent for a consideration of $3.
85 billion
.
If the agreement is reached, it will mean the end of the nine-year battle between Freeport and the Indonesian government for control of the
Grasberg copper mine.
The copper-gold mine is the second largest copper mine
in the world.
On the 5th and 26th, according to media reports, Zambia's new tax policy requires local imports of copper concentrate to be subject to a 5% tariff, which has caused a significant increase in costs for local crude copper smelters
.
News on the 6th and 24th, Chilean copper miner Antofagasta said that it lowered the high end of the annual copper production target range because of concerns that global trade disputes will continue to impact the market
.
Large miners such as BHP Billiton and Rio Tinto have also previously signaled a decline
in copper production this year.
