September 2021 cable raw materials (copper) monthly report

First, the macro aspect

International aspect,

1.
Fed officials decided to keep their key interest rate near zero, but said it could be raised slightly earlier than expected, while sharply lowering economic forecasts
for this year.
The Fed "may announce tapering at its next policy meeting as early as the next policy meeting," while not ruling out the possibility
of waiting longer before initiating.
The Fed's next policy meeting will be held
on November 2-3.

2.
The European Central Bank said it would cut emergency bond purchases in the coming quarter, taking the first small step
toward phasing out emergency aid.
The ECB did not provide guidance on the size of bond purchases over the next three months, but three sources told Reuters that the monthly bond purchase target set by ECB policymakers at the meeting for the pandemic emergency asset acquisition program (PEPP) is between 60 billion and 70 billion euros, maintaining the flexibility
to increase or decrease bond purchases depending on market conditions.

3.
The annual rate of unseasonally adjusted CPI in the United States recorded 5.
3% in August, in line with market expectations
.
The US core CPI recorded 0.
1% m/m in August, the lowest since
February this year.
U.
S.
manufacturing output rose 0.
2 percent in August from the previous month, compared with 1.
6 percent
in July, according to data released by the Federal Reserve.
Seasonally adjusted jobless claims rose 20,000 to 332,000 in the week ended Sept.
11,
according to the Labor Department report.
In the week ended September 4, the number of renewed jobless claims fell by 187,000 to 2.
665 million, the lowest level
since mid-March 2020.

4.
At present, the intensity of the epidemic in European and American countries has dropped significantly, and the vaccination rate in the United States has been greatly reduced
.
The speed of economic opening in Europe and the United States has risen sharply, but due to the reduction of the effect of stimulus policies and the impact of mutated viruses, the US economic data in July and August was less than expected, while the European economic data was better
.
It is expected that the European and American economies may maintain the recovery momentum in the fourth quarter of this year, forming a clear fundamental support
for the non-ferrous metals market.

Domestically,

1.
National Bureau of Statistics: In September, China's manufacturing purchasing managers' index (PMI) was 49.
6%, 0.
5 percentage points lower than the previous month, falling below the critical point, and the manufacturing boom level has declined
.

2.
The latest data from the National Bureau of Statistics shows that China's annual CPI rate in August recorded 0.
8%, compared with 1% in the previous month; August CPI came in at 0.
1% m/m vs 0.
3%
previously.
China's August PPI annual rate recorded 9.
5% compared with 9% in the previous month, an increase of 0.
5 percentage points
from the previous month.
According to Dong Lijuan, senior statistician of the Urban Department of the National Bureau of Statistics, in August, affected by the rise in prices of coal, chemicals and steel, the price of industrial products increased month-on-month and year-on-year
.

3.
According to the Passenger Association of China, the wholesale sales of new energy passenger vehicles reached 304,000 units in August, a year-on-year increase of 202.
3% and a month-on-month increase of 23.
7%.

Retail sales of new energy passenger vehicles in August reached 249,000 units, up 167.
5% y/y and 12.
0%
m/m.
However, retail sales of broad passenger cars in China in August fell 14.
7%
year-on-year.

4.
General Administration of Customs: In August, the total value of China's imports and exports was 3.
43 trillion yuan, an increase of 18.
9% year-on-year, an increase of 5% month-on-month, and an increase of 26.
1%
over the same period in 2019.
Among them, exports were 1.
9 trillion yuan, an increase of 15.
7% year-on-year, a month-on-month increase of 4.
9%, and an increase of 28.
6% over the same period in 2019; imports were 1.
53 trillion yuan, an increase of 23.
1% year-on-year, 5.
1% month-on-month, and 23.
1% over the same period in 2019; The trade surplus was 376.
31 billion yuan, a year-on-year decrease of 6.
8%.

Second, the market review

September copper prices showed a volatile trend, September 14 by the surrounding metal aluminum prices, nickel prices new high, Shanghai copper once approached 72,000, the market bullish atmosphere is strong, but not lasting, and then all the way down, Shanghai copper main operating range of 6.
83-71,500, the last trading day before the holiday as of 3 p.
m.
close, Shanghai copper main 2111 contract reported 67950, monthly decline of 2050 yuan, down 2.
93%.

The peak season is not prosperous, the Jinjiu favorable noodles are relatively scarce, the macro atmosphere is empty, and the domestic reserve dumping strength is maintained; And the Fed interest rate remained unchanged in September, but the expectation of Taper starting in November has gradually been implemented, the US bond yield soared at the end of the month, the US dollar reached a new high, and the US stock market fell sharply, all indicating that the market's risk aversion for the tightening of monetary policy has increased; However, on the other hand, the current domestic and foreign economic data caused by the epidemic and other factors have signs of decline, which has deepened the downward pressure on the economy in the second half of the year, especially in the fourth quarter, and put pressure on copper prices; Before the National Day, the downstream concentrated replenishment boosted the rise, which was favorable for Shanghai copper in the short term, and after the gradual return of market heat after the holiday, the trend of copper prices is expected to be weak
.

In terms of the market, spot copper in East China fell by 1560 yuan in September, and the premium fluctuated greatly
.
Among them, affected by the concentrated replenishment of the downstream before the Mid-Autumn Festival, the good copper premium once rose above 400, Guixi reached around 500 yuan, and other times it was stable around 200 yuan, near the National Day plummeted, indicating that the market transaction is basically completed, for the post-holiday trend to remain wait-and-see or relatively bearish
.
In terms of import profit and loss, the September window is mostly in an open situation, and due to the high domestic premium, the profit space on September 22 was close to 900 yuan / ton, and it was stable around 150 yuan / ton at the end of the month, and imported resources continued to flow
.

3.
Waste market

In September, copper prices fluctuated, spot copper fell by 1400 yuan / ton compared with the end of last month, scrap copper was about 660 yuan / ton, and the difference in refined waste price was around
960 yuan.

In September, the domestic scrap copper supply maintained a tight situation, the arrival of large traders in Foshan was scarce, and the overall scrap copper supply was less than half of the peak season, but there are signs of easing supply, and the overall supply in the northern region has begun to show signs of easing, and the available inventory of manufacturers has increased
.
Approaching the traditional domestic peak season, the downstream terminal demand has not yet fully exerted, and the traditional peak season effect is limited
.
In terms of finished product orders, with the stable price difference between refined waste and abundant raw materials, the substitution effect of refined copper has eased, and the downstream orders for copper rods before the holiday are better, mainly due to the concentrated replenishment of downstream stocks before the Mid-Autumn Festival and National Day
.
In addition, affected by the epidemic, the recent upgrading of control in various parts of Fujian, the pressure on logistics has increased, and the market transaction in Quanzhou Nan'an and other places has been restricted, and the price has also declined
significantly.
The market trend is not obvious, and the willingness of merchants to reduce inventory before the holiday is the mainstay
.

In September, the northern Jiangsu copper plant was affected by the policy and successively entered the shutdown, and the current flow of resources is mainly
in Anhui and Jiangxi.
In September, Hunan issued a policy to support the recycling of nonferrous resources, which is expected to drive the addition of recycled copper production capacity
.
It is understood that the recent arrival of the central environmental protection supervision team in Hubei, Xiangyang City and other places of some copper factories to limit production, and approaching the National Day holiday, logistics factors prompted Ningbo copper rod manufacturers to enter the countdown to suspend
shipments.
During the National Day holiday, some yards will suspend the receipt of goods, in the holiday period of hedging demand, the recent supply of goods is relatively sufficient, copper price quotation decline has not expanded, mainly around 200-300
.

4.
Trend forecast

On the whole, Shanghai copper rose first and then declined
in September.
At the beginning of the month, due to the abundant market confidence in the industrial season, Shanghai copper returned to the 70,000 mark, and after a short high shock, it went all the way down
.
Overseas markets are worried that the Fed's tightening policy is about to land, changes in the U.
S.
Treasury and U.
S.
dollar indexes have suppressed copper prices, and the poor recovery of overseas post-epidemic industries has also brought more risks
to the market.
Domestically, the official industrial PMI data in September fell below the boom and bust line, and the impact of power cuts and other factors on the industry will continue, copper demand was partially hit in expectations, and the pressure of domestic economic growth in the second half of the year was greater, which was negative for copper prices
on the macro level.
It is expected that next month, Shanghai copper is mainly weak and volatile, and it is easy to fall and difficult to rise
.

5.
Industry news

1.
According to the latest data of the General Administration of Customs, Fubao Nonferrous Metals, China's imports of copper refined sand and its concentrate in August 2021 were 1.
886 million tons, an increase of 18.
84% year-on-year, and China's imports of copper fine sand and its concentrate from January to August 2021 totaled 15.
268 million tons in 188, a cumulative increase of 7.
5%
year-on-year.
In August 2021, China's imports of unwrought copper and copper products were 394,000 tons, a year-on-year decrease of 41.
06%; From January to August 2021, China's imports of unwrought copper and copper products totaled 3.
613 million tons, a cumulative decrease of 15.
4%
year-on-year.

2.
A few days ago, Shengtun Mining, a leading enterprise of Xiamen cobalt materials, announced that in order to further focus on nickel, copper and cobalt energy metal business, it will spend 6.
193 billion yuan to build a new energy material project with an annual output of 300,000 tons of battery-grade nickel sulfate, 300,000 tons of battery-grade iron phosphate and 10,000 tons of battery-grade cobalt products in Guizhou, which has attracted attention from the outside world
.

3.
Since late September, the "power rationing tide" has affected many provinces across the country, not only industrial electricity, but also residential electricity consumption
.
It is understood that the inversion of coal power prices is one of the main reasons for the
current "power rationing and power outage".
It is found that Inner Mongolia, Ningxia, Shanghai and other regions have successively started the adjustment of "electricity prices", allowing the trading price of coal power market to float
upward on the basis of the benchmark electricity price.

4.
It is understood that the CSPT team held a general manager's office meeting in Shanghai and finalized the spot copper concentrate procurement guidance processing fee of 70 US dollars / ton and 7.
0 cents / pound
in the fourth quarter 。 Since the beginning of the year, copper concentrate spot TC has continued to fall, after the end of March has fallen to around $30 / ton, the lowest level in a decade, a number of smelters said that they could not accept a price below $30 / ton, affected by this, the second quarter CSPT group quarterly meeting did not determine the guidance price, and the third quarter guidance price slightly higher than the first quarter, the fourth quarter guidance price has increased significantly from the previous period, but more than double the low point of the year, but also indicates that the shortage of copper concentrate supply since the second half of the year has continued to improve
。

5.
The National Development and Reform Commission said that all parties in the market reacted enthusiastically to the release of reserves, and the current price of copper, aluminum and zinc is still running at a high level
.
In the next step, we will closely track and monitor market price changes, and continue to release material reserves into the market to guide prices to gradually return to a reasonable range
.

6.
Jiangxi Copper Company said that Jiangxi Copper is currently monitoring the situation in Afghanistan with China Metallurgical Group Corporation (MCC) and will promote the construction
of the Mes Aynak copper mine if possible.
In 2008, the company and MCC signed a 30-year lease for the mine, which is expected to have 11.
08 million tonnes of copper reserves.

Jiangxi Copper holds a 25% stake
in the project.