The traditional off-season season is coming


Recently, copper prices have risen strongly in the context of steady demand and tight supply. However, from a macroscopic point of view, it is still too early to say that the copper market continues to move.

Multiple factors are difficult to macroscopically

Since June, the Chinese and American economies have shown a steady upward trend. According to relevant data, the number of non-agricultural employment in the United States in May far exceeded expectations, and the unemployment rate hit a new low. The US manufacturing PMI was 58.7, which was better than expected. Meanwhile, China's manufacturing PMI in May was 51.9. %, the highest point since October 2017. Although the data performance is getting better and the market optimism is rekindled, the author believes that this is only a short-term result of various factors. The US's unique pattern cannot form a global resonance. The uncertainty of the Middle East situation, trade friction and other factors will continue. Dragging down economic growth.

Domestically, from the historical trend, the growth rate of scissors of M1-M2 is highly consistent with the rise and fall of bulk commodities. The difference between scissors is positive, and commodities are bull markets. Otherwise, they are generally in a bear market. The reason behind this is that its trend is highly correlated with real estate sales, and China's real estate cycle is the "mother of the cycle." When real estate sales were hot, the first payment of residents' home purchases rose rapidly, and their savings deposits continued to shift to the real-time funds of real estate companies. The growth rate of M1 was faster than that of M2. Under the background of real estate regulation and control, the leverage of residential real estate can not be added. The performance of the developer is tightened, and the chain period of investment construction is lengthened. Therefore, the current growth rate of M1-M2 scissors is from the positive to the negative stage, and the action on commodities can be weak, and it does not have the basis of a big bull market.

The demand side is difficult to have a bright performance

From the perspective of terminal consumption growth, copper consumption maintained a good 3.5% in the first quarter of this year. As far as each sub-industry is concerned, it is difficult to have a bright spot. Among them, construction consumption still depends on the support of investment, and based on the above analysis, we are doubtful about the performance of real estate consumption in the second half of the year, which will drag the investment market further. Air-conditioning production recorded a good growth in June, but in the second half of the year, it will face the challenge of high base last year. Air-conditioning exports have continued to grow for two years, but it is not ruled out because of trade frictions. On the whole, in the second half of the year, the domestic economy is still driven by de-leverage, and there is still some downward pressure. It is difficult for the copper consumer sub-sector to run smoothly.

Supply surface interference factors are frequent

There are supply-side interference factors both inside and outside. First, it comes from the overseas mining market. Last year, the Escondida strike lasted for 44 days, resulting in a large loss of the mine end, but it can still guarantee the production of refined copper by consuming the original stock. . Since this year, the concentrate TC has been at a low level. If the same strike event occurs, it will have a greater impact on the production of refined copper. The market cautiously began to heat up the negotiations. From the history and the results of the Chilean regional negotiations from January to May this year, the welfare that the workers finally won is half of the target, and we believe that the salary increase of this level will be fully borne by BHP Billiton, and the Escondida large-scale strike is expected to gradually decline.

Second, the overseas Indian copper smelting plant caused local environmental rebellion, the shutdown of the crude chain, the short-term overseas production of refined copper was damaged, and in the long run, even if all were shut down, China's new smelting capacity could be enough to make up.

Third, under the influence of domestic environmental inspections, the copper production in the copper area in Jiangxi Province triggered a hot discussion. According to our inventory, the average monthly output of scrap copper produced in the region is over 10,000 tons. However, medium and large enterprises have not affected. The key to the future depends on the sustainability of environmental protection. If the environmental supervision is not long, the smelter can spend the period of environmental protection and high pressure by consuming crude copper stocks.

Taken together, the uncertainty of the supply-side stacking raises the space below the copper price.

At present, the interference at the supply side has been reflected in the price, and the price increase has in turn stimulated the increase in supply. However, domestic consumption is about to enter the traditional off-season. The matching of supply and demand under the new price does not bring much boost. The copper price is still high. It is a high oscillation.

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