Copper Weekly Review: Non-agricultural or boosted copper price gains

Core Tip : On the whole, the industry believes that we will maintain a judgment on the technical shock of price fluctuations in the short-term. It is expected that the weekly support level of copper will be 7,000-7100 US dollars, and the pressure level will be 7300 US dollars. Compared with the Shanghai copper period, the range is 5.1-5.25 million. Spot copper 5.15-5.28 million; scrap copper 4.65-4.85 million.

First, the electrolytic copper market

This week, the Shanghai copper futures rose and fell, and the weekly high on Tuesday and Thursday, the copper price fell back to the previous increase on Wednesday, and the spot copper continued to rise 250 yuan this week. The spot copper fluctuated between 52000-53000 every week. The specific data are as follows: : This week, the domestic spot market was first raised and then suppressed. The rise in copper prices in the first half of the week promoted the shipment of traders, especially arbitrage. However, from the point of view of the premium, the stocks are actively shipped, but there is no willingness to sell at a lower price. The copper premium has maintained a high premium of 250 yuan. After the copper price fell in the second half of the week, the market supply suddenly tightened. The Fubao Copper Research Group learned from a trader in Shanghai that traders were reluctant to sell and not sell on Thursday, and a small number of sets of insurance were shipped. The spot copper market, like the futures market, is short-selling, and the upper, middle and lower reaches are generally bearish, which is the main reason for the continued downturn in this week's trading. This week, a number of economic data were positive, but failed to eliminate the market's pessimism. Most investors in the period suppressed the price, and spot copper was forced to fall. This week, the ratio of Shanghai and Shanghai continued to rise, and the trend of strong external weakness in the last week also vanished. From the Shanghai-Lennon ratio and the import profit and loss chart, as the Shanghai-London ratio rebounds, the import profit and loss window gradually narrows to minus 200. Coupled with the spot copper premium of 250 yuan / ton, the early imports of good copper can also be slightly shipped, as of Friday, the theoretical loss of copper imports has been reduced to 93 yuan / ton. Standard Bank said in an email report on Thursday that copper stocks in China's bonded warehouses rose to 400,000 to 450,000 tons last month. The bank said that copper premiums in China's bonded warehouses have declined in the past few weeks as copper supply has increased. The above information is not difficult to see, China's August copper imports should also take the upward route.

A new round of copper mine strikes in the foreign copper market will begin again. Union leaders said Chile's Codelco's Salvador copper miners began strikes in the early hours of Thursday, which accounted for 4% of Codelco's production. The world's largest copper mine, the Chilean Escondia copper miners, voted on the division of labor before September 6. If the vote is not passed, a second strike will be held. In addition, the salary negotiations of the Indonesian Copper Mines, the world's second largest copper mine, Freeport's McMullen Copper and Gold Company, have also reached a stalemate, not to rule out the mine production disruption or even the risk of unrest. If the strike is actually fulfilled, it is expected to stimulate the current weak copper price, or cause a temporary rebound in copper prices.

Second, the recycled copper market

1, electrolytic copper and bright lines

This week, the price of scrap copper fluctuated within a narrow range, and the focus continued to move down. The market turnover remained deserted. Foshan's bright line averaged 48,170 this week, which was more obvious than last week's decline. The decline was less than 1%, and the shock was not sharp. From the figure, it can be clearly seen that the price of scrap copper has entered the adjustment area, and there is still a downward pressure on the short-term technical side. The refined price difference is gradually falling, indicating that the price of scrap copper has been bearish in the near term. The price of scrap copper has not risen or fallen this week. Due to the large amount of macro news in various fields, Lido and Likong are intertwined, and copper prices are in a dilemma. The most important economic data this week is still the non-agricultural data on Friday night. At present, from the perspective of all parties, they are waiting quietly. The good domestic PMI has given the copper price a certain stimulus, but it is difficult for many parties to gain the upper hand. At present, the copper price is still difficult to improve, but the technical rebound is worth looking forward to.

In the spot market of scrap copper, this week's scrap copper prices showed signs of resistance, so the price difference of refined scraps gradually narrowed. Since August, merchants and manufacturers have been more active in transactions, and the current supply on the market appears to be relatively tight. Since most merchants are still optimistic about the market outlook, the asking price is still firm, and the transaction is light this week. We recommend that businesses wait for the price of copper to stabilize and choose the right goods.

2, cable companies order to heat up

According to the tracking and investigation of cable enterprises in Shandong this week, the data shows that the average operating rate of 35 large and medium-sized enterprises is 66.42%. The annual production capacity of 6 large-scale enterprises is over 10,000 tons, with an average annual production capacity of 25,000 tons. The annual production capacity of 16 medium-sized enterprises is between 1000-10000 tons, with an average annual production capacity of 3,13.75 tons. There are 13 small-scale enterprises with an annual production capacity of 1,000 tons. Below, the average annual production capacity is as low as 410.3 tons.

Operating rate: In August (66.42%), the average operating rate in July was 62.33%, an increase of 4.09 points. Large and medium-sized enterprises have shown signs of recovery. The merchants reflected that there were three reasons for this: firstly, the price of copper at the beginning of the month drove some transactions in the market; secondly, although the high temperature troubles in the past few days prevented the construction site from starting or even stopping work, the cooling at the end of the month and the rise in copper prices boosted the operating rate gradually; Finally, due to the end of the so-called off-season, many companies have accelerated production waiting for "Golden September and Silver 10" to release more orders.

Third, the downstream market analysis

This week, Zhejiang Jinlong Hpb58-3 brass rod ex-factory price has once again moved down, mainly due to the increase in Syrian concerns this week, causing copper price shocks to fall, from the high near 7300 to the current 7100 US dollars, businesses frequently cut the price. The current price of brass rods is stable at 36,700 yuan / ton, and it is expected that there will be little room for further reduction next week. It is understood that the overall transaction in the copper market is relatively stable, but the off-season still has a certain impact on market demand, and copper orders are still slightly suppressed. In the past two weeks, the rebound in copper prices has been hindered, and the procurement of raw materials for copper processed materials companies has slowed down, and it is expected that there will be more low-end purchases. On the whole, the start of copper production has warmed up. The traditional “Golden Nine” is coming. Many copper factories have started to replenish their stocks since the beginning of August, and most of them are preparing for the peak season. However, at present, there are many uncertainties in the macro-level, and the direction of copper price is still to be guided. Therefore, copper factories have less bulk purchases, and small-scale enterprises in the market have more goods. It is expected that the downstream replenishment operation will increase until mid-September, and the market is expected to pick up in late September. At the same time, during the holiday in September, sales of home appliances will also enter the preferential season, and orders for copper pipe companies will increase.

At present, the summer is gradually turning cold, while the cable enterprise orders are entering the "warming" period. According to Fubao's survey data, in North China, where the start-up is relatively low, the operating rate in August increased by about 4% from the previous month, and the large cable factory started to return to 80%. The orders for SMEs also improved slightly. The rebound in copper prices and the retreat of high temperatures were all better than the start of the business. As a result, orders for major cable processing enterprises in China rose steadily in August, and some enterprises resumed to the level of construction in April and May. In the second half of the year, with the acceleration of infrastructure construction, cable usage will further increase, but it will not solve the problem of overcapacity in the cable industry. The copper price trend is still weak, and the country is accelerating the elimination of backward production capacity. Will gradually withdraw from the market.

Fourth, futures market analysis and forecast

This week, the price of copper fell back, and the center of gravity shifted slightly, in line with expectations. From the trend point of view, copper price was supported by the 40-day moving average, and the trend of the correction slowed down, as shown in the following figure: On the macro level, China announced last August that the official PMI index for August was 51, up from 50.3 in July, and the HSBC Purchasing Managers Index was 50.1. As the initial value of the HSBC Purchasing Managers Index announced last week has increased significantly, it suggests that China's economic recovery is increasing. The US ISM manufacturing purchasing managers index for August was 55.7, higher than July, and the non-manufacturing purchasing managers index was 58.6, which was much higher than the 56 in July. In addition, the private sector employment in August was increased by 176,000 in August. The number of new jobless claims last week was 323,000, which is at a low level since 2007, which is in line with the judgment of stable economic recovery. In Europe, the final value of the manufacturing PMI for the Eurozone in August was 51.4, much higher than the 50.3 in July, which added to the sustainability and reliability of the European economy. With the gradual improvement of the US economy and the expected increase in global recovery, the possibility of reducing the purchase of bonds by the Fed meeting in mid-September has also increased accordingly, and Obama has also released corresponding signals at the G20 meeting; however, many emerging countries have raised interest rates to individual countries. The recovery brought pressure. The US August non-farm payrolls data, which will be released on Friday night, is considered to be very important. This will play an important role in determining when QE will withdraw. Next week, the US government will use force against Syria, which will be a negative for the capital market. On the above, the macro face will face greater uncertainty next week.

According to the report of the Chilean National Copper Council, Chile's copper output in January-July 2013 totaled 3.25 million tons, up 7% year-on-year, the largest increase since 2004. The monthly copper output was 480,440 tons, up 16% year-on-year. In terms of the mining area, the output of the Escondida mining area increased the most, with 100,000 tons; followed by the Collahuasi mining area, which increased production by 34,000 tons; the third was the increase of 28,000 tons of the Anglo American South Mine; the Esperanza mining area increased by 24,000 tons; the Candelaria Mine was 19,000 tons. The Los Pelambres mining area is 7,000 tons; the Chilean National Copper Company (Codelco) has an increase of 4,000 tons.

Excluding the factors affecting the relative low base of the previous year, Chile's new mine output increased significantly in 2013, and the grade of the old mines increased (sustainability is not high). The statistics of Chile's copper production in the previous July are as follows: It is obvious from the data that Chile's copper mine production in 2013 has achieved positive growth compared to 2012, and the cumulative growth rate is expected to remain above 5%. In terms of cost, Chile's copper direct production cost is 1.71 US dollars / lb, an increase of 5%, the growth rate is still relatively fast; and Chile's environmental protection requirements increase, resulting in increased costs in equipment, services, engineering and construction, miners in the past three years The cost of camps has increased by 40%. Compared with the increase in copper production, both direct and indirect costs of copper will continue to rise. According to the tracking data, in 2013, the global copper concentrate market added 1.034 million tons of production capacity, and in the next three years, theoretically added nearly 5,500,000 tons of production capacity. Mainly Chile and Peru have increased by a large margin, and from time to time, the increase in 2014, 2015 and 2016 is large. However, considering the decline in grade, capacity utilization and other force majeure factors, the actual production of copper concentrate in 2013 will be lower than the theoretical output, but we still maintain the basic judgment that copper supply exceeds demand.

Although the copper price has been boosted by the recent favorable economic data, it has risen steadily; but due to the impact of supply and demand, the upward trend is expected to be relatively limited, and the rebound market must not be reversed. In the short-term, we will maintain the judgment of the technical shock of price fluctuations. It is expected that the weekly copper support level is 7000-7100 US dollars and the pressure level is 7300 US dollars; compared with the Shanghai copper period, the operating range is 5.1-5.25 million; the spot copper is 5.15-5.28 million; 4.65-4.85 million.

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