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Short-term logic: Copper concentrate processing fees did not fall further last week, remaining flat from the previous week, with extreme processing fees still below $70/mt
。 The short-term supply of copper concentrate is still tight, but from the perspective of market conditions, the tight copper concentrate has led to an increase in demand for copper scrap, and the price spread of copper scrap has narrowed; The resumption of production of Chile's Escondida copper mine is expected to ease the supply of copper concentrate to a certain extent, and the processing fee may not be further reduced in the short term, but due to the low elasticity of scrap copper supply, it cannot continuously increase supply, so the resumption of production of Chile's Escondida copper mine is only to re-squeeze the share of scrap copper, and the damage to copper prices is relatively limited
.
Medium-term logic: the rigid increase in global copper concentrate supply in 2017 is relatively small, and the elastic increase mainly depends on the price, and although the refining capacity is more put in, 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
.
In terms of the market, on the 30th, the spot market discount was further narrowed, but the narrowing was not very large, which is not a very good phenomenon, in essence, it is still a price increase behavior of cargo owners, and has not received a downstream response
.
In addition, the price difference between spot brands has widened, especially wet copper, which has fewer sources in the market, and the discount has not narrowed, which further proves that the enthusiasm for downstream procurement is poor
.
From the perspective of spot market transaction monitoring, the market transaction entities are mainly middlemen and cargo owners' mutual exchange behavior, and the direct participation of downstream enterprises is limited, which is mutually verified
with the change pattern of spot discounts.
In addition, from the perspective of profits, copper rod processing fees and cable profits have declined with the recovery of copper prices, and the downstream lacks cost pass-through ability, and the terminal demand force is relatively weak
.
On the news, according to a senior Indonesian official, the negotiations between the Indonesian government and Freeport McMooran have reached a preliminary short-term consensus, and Indonesia will allow the freeport to resume operations and exports for six months
.
Although it has not yet been strongly confirmed, the previous reduction of mine production in the Indonesian free port has caused some miners to be unemployed, and the Indonesian government is under more pressure from miners, so it is more credible
.
Chile's copper production in February was 376,948 tonnes, down 16.
7%
from a year earlier and the previous month.
The main factor affecting the country's copper production in February was the strike activity at the Escondida copper mine, the world's largest copper mine
.
The Escondida copper mine has ended, and if the resumption of production in the free port is added, the elastic increase brought by about 120,000 tons/month will increase about 6%
year-on-year.
As things stand, it is difficult to reach 6% global demand, so it may not be possible to force the copper downstream industry chain to replenish inventory
.
On the whole, this round of copper adjustment has not yet shown signs of
ending.
By around 46,000 encountered a brace pick-up
.
However, both the moving average system and the price pattern show signs of weakness, and the possibility of continued weakening remains
.
At present, the timing of copper price increases may not be ripe, or it may continue to be in a state
of shock brewing.
