1、 Trend analysis
According to the monitoring data of the business association, the initial copper price in 2020 fell continuously, falling to the lowest point of the year of 36560 yuan / ton (March 23), a drop of 25.44%, and then rebounded to the bottom. As of April 14, the copper price rebounded by 14.87% to 41995 yuan / ton.
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According to the monitoring data of the business agency, the spot copper price on March 23 reached a ten-year low, close to the low in September 2016. The current copper price level is equivalent to the price level in November 2016.
According to the current chart of the business association, the price of spot copper is very close to that of the main copper contract. The price of spot copper is slightly higher than that of the main contract for most of the past month, indicating that people are not so optimistic about the future copper price, nor are they particularly pessimistic.
Copper supply cut copper price rebound
Peru and other copper producing countries have taken measures to cut supply or interrupt logistics. MMG revoked the production guidelines of Las bambas copper mine in 2020. At present, the transportation of copper concentrate has been suspended. The total copper output of this copper mine in 2019 is 3825200 tons. BHP Billiton and Glencore holding Antamina copper mine in Peru has been shut down for two weeks due to the epidemic, and the copper output of this mine in 2019 is 44859 tons. Supply cuts raise concerns about copper supply. However, domestic refined copper production picked up in March. According to the survey data, 22 sample enterprises produced 665000 tons of cathode copper, an increase of 2.6% on a month on month basis.
List of domestic smelters affected by the epidemic:
Enterprise name
Smelter
Production in 2019 (10000 tons)
Take steps
Daye coloured
Daye Nonferrous refinery
Fifty-one
2. Reduce production rate in March
Jiangxi copper industry
Jiangxi copper (Headquarters)
One hundred and three
Reduce the feeding amount
SDIC Jincheng metallurgy
SDIC Jincheng metallurgy 11.25
Two
Production cut in March
Yuguang Gold and lead
Yuguang Gold lead copper smelter
Eleven
Production reduction in February and normal maintenance in April
Gold in gold
Zhongyuan Gold Copper Smelter
Three
1.2 – quarterly production reduction due to sulfuric acid and local environmental protection policies
Tongling Nonferrous group
Tongguan + Jinlong + aolu
Ninety-six
Reduce the feeding amount
Guangxi Nanguo copper industry
Guangxi Nanguo steel refinery
Ten
Extend maintenance and reduce production rate
Anhui Youjin Guanhua
Anhui Youjin Guanhua
Eight
January overhaul
Fei Shang copper industry
Fei Shang steel industry
Eight
Production cut in February
Jiangxi copper Fuye heding
Jiangxi copper Fuye heding
Forty-six point nine
One production line for maintenance and another production line for lowering feeding
Lingbao Gold
Lingbao Gold
Ten
2. Production cut in March
Sheng Hai chemical industry
Sheng Hai chemical industry
Eight
Production cut in February
zijin mining
Heilongjiang Zijin
Three point five
Production cut in February
Copper Group
Chifeng Jinfeng
Twenty
Reduce the feeding amount
Malaysia’s export of scrap copper delayed
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Malaysia renewed its action control order until April 28, when plant construction was still restricted, the recovery of scrap export was expected to be delayed, and the substitutability of refined copper for scrap was also expected to be enhanced.
Copper import and export are not affected temporarily
The General Administration of Customs released the import data of unwrought and rolled copper and copper materials in March 2020. According to the data, China imported 441926 tons of unwrought copper and copper materials in March, an increase of 13% year on year, and about 1.28 million tons from January to March this year. From January to February, it was 846107 tons. In March 2019, China imported 391000 tons of unwrought and rolled copper and copper materials, with a total of 1.18 million tons imported from January to March last year.
Domestic demand picks up and exports suffer
After the resumption of work and production in China, there will be a certain amount of compensation for the demand, but the deterioration of the overseas epidemic will cause a secondary impact on the demand of the manufacturing industry, especially the export of home appliances and mechanical and electrical products, which may have a potential demand impact of about 650000 tons. New infrastructure investment has a certain pull on copper consumption. New infrastructure projects such as 5g network, UHV, intercity high-speed railway, urban rail transit and new energy vehicle charging piles, according to the planned investment amount in 2020, respectively pull up copper consumption of 25000 tons, 100000 tons, 20000 tons and 9000 tons, totaling about 154000 tons, accounting for about 1.4% of domestic copper consumption. The actual proportion is limited.
The terminal industry is greatly affected by exports
In March, automobile production and sales dropped sharply year-on-year. On the one hand, export-oriented export-oriented enterprises faced three to half a year’s work stoppage, and employees’ income declined, which affected some automobile consumers; on the other hand, the export of Chinese brand automobiles and parts was blocked. In terms of household appliances, many air-conditioning enterprises’ export orders were cancelled by overseas customers in March, and the traditional air-conditioning sales peak season from April to May will be lost.
Outlook for the future
According to the above situation, copper analysts of nonferrous branch of business agency believe that: copper prices have rebounded continuously, on the one hand, because copper production has been reduced or even interrupted, which has increased the market’s concern about copper supply, and copper prices have risen; on the other hand, with the resumption of domestic production, domestic demand has been partially restored, and the new national infrastructure also has a certain role in boosting. However, with the continuous fermentation of overseas epidemics, it not only affects the supply of foreign copper, but also affects the domestic terminal exports and then affects the demand for copper. Although London Metal Exchange (LME) closed on Monday, London copper opened sharply higher on the morning of the 14th, but it is hard to say that the market reversed when demand expectations are not optimistic. It is expected that copper will still be supported by copper supply interference in the short term and demand will be affected at the same time. The price is expected to fluctuate between 40000-44000 yuan / ton.
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