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On Monday, the market was closed for Easter, and the domestic copper price lacked guidance, and Shanghai copper was generally strong
.
China announced that it would suspend tariff concessions on 128 items imported from the United States in 7 categories from this week, and impose import tariffs of up to 25%, and the escalation of the Sino-US trade dispute hit market sentiment; Pressure on the metal
.
China's manufacturing data for March was strong, indicating that the domestic economy is generally running smoothly, copper market demand may gradually pick up, and copper is expected to rise
slightly today.
In terms of news, since April 2, 2018, the Tariff Commission of the State Council has decided to suspend the tariff reduction obligation for some imported goods originating in the United States; This shows that China will not budge, and the direction of the overall trade war is still a big risk
.
In addition, the March PMI data exceeded the market's general expectations, but for the future, it is not very optimistic at present, that is, macro traders' pessimistic expectations for the future remain unchanged
.
In terms of downstream demand, ICSG expects that the growth rate of global refined copper consumption will be only 1% in 2017 and will rise to 2.
3%
in 2018.
According to ICSG statistics, the global use of copper scrap rose to 8 million tons in 2017, of which less than 3 million tons were used indirectly and more than 5 million tons were used directly
.
Global copper mine production fell 2.
7% in 2017, and production recovery in 2018 is expected to increase by 2.
5%, an increase of about 500,000 tons, and an increase of 1.
9% or 400,000 tons
in 2019.
Medium-term logic: the rigid increase in global copper concentrate supply in the next 5 years is relatively small, and the elastic increase mainly depends on the price, and although the refining capacity is more launched, but limited by the supply of copper concentrate, the actual supply increment is not enough to make the copper price fall again, so the medium-term copper price bottom is expected to be obvious
.
Short-term logic: the supply side continues to be at a high level, and the current processing fee smelting enterprises are still acceptable, especially in the case of reduced tax rates, and the supply is expected to be relatively stable; On the demand side, demand began to recover seasonally, especially large enterprises, performing better, but mainly due to the acceleration of industry concentration, which means that the subsequent seasonal switching momentum is difficult to further improve, in addition, the overall economic deleveraging has been gradually clear, demand short-term concerns are still relatively large, therefore, copper prices rose last week only look at the rebound, there is still a risk of falling, the price really improves still takes time
.
On the whole, due to the arbitrage of the tax rate, the spot performance is relatively strong, but the decline in the tax rate in May began to land, which means that the sales pressure is concentrated in the May contract, and there may be a concentrated cash dump, and the current actual demand is not enough to support all the realization, in addition, coupled with the outlook of demand, copper is still mainly selling short on the high for the time being
.
