Strike expectations still exist Copper market demand is not weak in the off-season

Due to the tough diplomatic relations of the United States towards Turkey, coupled with Turkey's internal economic problems, the maintenance of loose monetary policy under high inflation and high debt, the continuous depreciation of the Turkish lira, and the European Central Bank's concern about Turkey's rising risk exposure, the lira's decline
has been exacerbated.
But the Turkish president was tough, and Trump then doubled tariffs on Turkish steel and aluminum imports to 50 percent and 20 percent
.
Turkey suffered a currency crisis, dragging down emerging markets, the Russian ruble, South African rand, yuan, etc.
also fell sharply, the US dollar was supported by safe-haven buying demand, quickly strengthened, once again standing above 96, giving pressure
to the non-ferrous market.

On August 1, the United States said it wanted to raise the tariff rate of 200 billion goods to 25%, and China announced a list of 60 billion US dollars of commodity tariffs, and the implementation time depends on the United States
.
In just one week, the Sino-US trade war escalated
again.
On August 8, the United States announced that it would impose 25% tariffs on an additional $16 billion of Chinese goods starting August 23, and China immediately responded
with equal force.
The two tariffs involved 34 copper products and copper products, as well as copper
scrap.
Since China's total copper imports from the United States in 2017 were 7445.
86 tons, accounting for 1.
28% of the total imports, the impact was not great
.
China imported 535,000 tons of copper scrap from the United States in 2017, accounting for 15%.

Although the escalation of the Sino-US trade war has boosted safe-haven demand for the US dollar, increased the downward pressure on China's economy, and triggered market concerns about Chinese demand, the restrictions on scrap copper imports have boosted refined copper demand
.

The Escondida Miners' Association, the world's largest copper mine, previously rejected BHP Billiton's salary offer, and after government mediation failed, BHP Billiton raised the miner's salary offer again on August 13, raising the previous salary increase of 1.
5% to 2%.

Overall, BHP's compromise has helped improve relations between the two sides, and the expectation of a strike has cooled, but this salary level is still lower than the union's requirements, so there is greater uncertainty
about whether to strike.
Even if a strike occurs, it is expected to be of limited duration, but as the largest copper mine, it has a benchmark effect, and strike sentiment may be transmitted to other mines facing wage negotiations
.
In addition to this, Chilean EI Teniente accepted the company's offer for a payroll contract
.
Chile's Caserones copper miners will expand the scope of the settlement with the company, extending negotiations until August 16, when a strike
was scheduled for August 14.
Overall, the uncertainty of the strike still exists, but the current copper mine production maintains steady growth, coupled with sufficient smelter reserves, imported copper concentrate processing fees TC remains high, last week at $85-90/ton, copper concentrate supply is slightly loose
.

According to SMM, the operating rate of copper pipe enterprises in August is 83.
96%, down 5.
53 percentage points month-on-month and 1 percentage point
year-on-year.
However, China's imports of unwrought copper and copper products in July were 452,000 tons, up 15.
9%
year-on-year.
Under the high growth rate of copper imports, inventories have continued to decline since mid-June, and as of August 10, the total inventory of the three major exchanges and bonded zones was 1.
17 million tons, basically unchanged from the same period
last year.
On the one hand, copper prices have fallen sharply since this year, and downstream bargain replenishment has increased, on the other hand, the price difference of refined waste is at a low level, superimposed on scrap copper import policies and tariff issues, boosting refined copper demand
.
In the second half of the year, China will expand domestic demand and increase infrastructure investment, and the copper market may benefit
.

On the whole, the global macro is complex and changeable, the relationship between the United States and Russia and Turkey has deteriorated, emerging markets have suffered heavy losses, Sino-US trade frictions continue to escalate, the US dollar has rebounded strongly, and the non-ferrous metals market is under pressure as a whole, but considering the fundamental differentiation of different varieties, multi-copper air zinc operations
can be considered.