-
Categories
-
Pharmaceutical Intermediates
-
Active Pharmaceutical Ingredients
-
Food Additives
- Industrial Coatings
- Agrochemicals
- Dyes and Pigments
- Surfactant
- Flavors and Fragrances
- Chemical Reagents
- Catalyst and Auxiliary
- Natural Products
- Inorganic Chemistry
-
Organic Chemistry
-
Biochemical Engineering
- Analytical Chemistry
-
Cosmetic Ingredient
- Water Treatment Chemical
-
Pharmaceutical Intermediates
Promotion
ECHEMI Mall
Wholesale
Weekly Price
Exhibition
News
-
Trade Service
Entering the traditional peak season in March, copper prices at home and abroad have rebounded to a certain extent, but they have not shaken off the range-bound trend
since December 2016.
For future copper prices, the author believes that the potential bullish has been reflected through the price
.
Some negative impacts on copper prices have not yet been reflected, including the possible falsification of copper consumption driven by infrastructure investment, the lagging effect of real estate adjustment has not yet appeared, and the potential impact
of the Fed's interest rate hike.
Therefore, it is necessary to pay attention to the risk
of an inflection point where demand growth is difficult to deliver.
Supply-side disruptions are reflected in prices
Looking back at copper prices in 2016, the downstream consumption improvement and destocking brought about by the real estate boom have been reflected in
prices.
The new high in copper prices in mid-February reflects market expectations of disruptions such as strikes at copper mines, so supply-side disruptions are actually reflected in prices
.
Looking back at copper prices from 2000 to the present, copper strikes have not been the dominant factor
in copper price increases.
Since 2006, there have been strikes at copper mines every year except 2010, 2012 and 2016, but in July 2011 Escondida experienced a two-week strike that caused copper prices to rise by more than 5% that month, and finally retreated
sharply with the end of the strike.
In addition, copper strikes are often unsustainable in the early stages of economic recovery, and unions struggle to reap profit-sharing
from a weak economy and depressed copper prices.
In 2016, with the rebound of copper prices, global mining investment has gradually recovered, and some postponed projects will be restarted
one after another.
Factors supporting the short-term strength of copper prices
On the one hand, economic data show that the recovery of China and the global economy is not over
.
As a cyclical variety, copper economic recovery or growth is closely related to copper prices
.
From the perspective of leading indicators, the global manufacturing industry maintained the momentum of recovery in February, with China's official manufacturing PMI at 51.
6 in February, higher than the expected 51.
2 and 51.
3 in the previous month; the US ISM manufacturing index in February at 57.
7, the highest since August 2014; and the Eurozone manufacturing PMI at 55.
4 in February, slightly lower than the expected and preliminary value of 55.
5, but still expanding
.
However, the economic situation in 2011-2016 is quite similar to that of 1996-2000, and the trend of copper prices in 2017 may replicate the trend of 2000.
On the other hand, the increase in industrial concentration has made the market ignore the changes in
downstream structural demand.
A suitable explanation for the divergence is that a large number of small businesses are closed, so corporate orders are concentrated in
large enterprises.
The statistical caliber of output is only about 2/3 of the statistical caliber of added value, less than 70%, and the increase in industrial concentration makes it easy for the market to ignore the structural problems
of the decline in the market share of small and medium-sized enterprises and the overall downstream order recovery.
In short, the short-term macro data is good, which means that the recovery brought by replenishment is not over
.
Industry concentration has increased, and large enterprises have sufficient orders, so copper prices are firm
in the short term.
However, the recovery on the demand side remains weak, and the high oscillations of copper prices have accumulated downside risks
.
