The hottest copper price may usher in a rebound

2022-08-10
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Copper prices may usher in a rebound

the U.S. economy has continued its previous mild recovery since the beginning of the year. The recently announced final PMI of Markit manufacturing in the United States in March was 55.6, lower than the previous value and expectations, but it still hit a new high since March 2015, and the manufacturing industry as a whole maintained an upward trend of oscillation. Since January, a number of economic indicators in Europe and Japan have shown that growth has slowed down, especially the economic recovery in the euro area is also weaker than market expectations, and the prosperity indexes of industry, retail and service industries have all fallen. It is expected that the possibility of a sharp rebound in the euro area economy in the second quarter is relatively small, and the probability will continue to remain weak

the basic allocation above the national level is about 30000 yuan, and the economy is still the focus of market attention. The recent data trend differentiation is prominent, which makes investors more worried. In March, China's official manufacturing PMI continued to rise month on month and was better than expected, while Caixin manufacturing PMI fell month on month and hit a four month low. From the perspective of demand, the household appliance industry is relatively prosperous, the demand of the automotive industry is stable, and the growth rate of real estate sales in the focus has fallen sharply, with the decline led by the first and second tier cities as the main drag. Although the growth rate of sales in the third and fourth tier cities has turned positive, considering the low base last year, the actual demand of the third and fourth tier cities has weakened, which casts doubt on the overall support of the real estate end

the current market uncertainty is still the Sino US trade friction that broke out in early April. In the short term, the overall risk appetite is suppressed to a certain extent, but in the long term, it still depends on the logic of the market itself

be alert to risk factors

from top to bottom, the main variable is the real estate related industrial chain. The slowdown in real estate sales will drag down real estate investment, thus affecting new construction and construction area, putting pressure on real estate demand. From the perspective of bottom-up industries, the demand for electric wires and cables with low noise is expected to maintain a good momentum in April. Boosted by power orders, large factory orders and production performance are good, while orders from real estate and engineering are average. The year-on-year control of the experimental process in the second quarter is achieved through the automatic control of a single chip machine, which may or may not have a brilliant performance

after the year-on-year output of air conditioning enterprises nearly doubled in March, the year-on-year growth rate of output fell in April, but it still recorded a growth rate of about 15%. Although the channel inventory has increased, while the air conditioning capacity has expanded, the actual inventory days are falling. Whether the growth momentum of nearly two months can be maintained in the later period depends on the weather on the one hand, and on the other hand, we still need to pay attention to the performance of the real estate end. Based on the situation of large copper consumption areas, it is expected that the rebound of copper consumption in the second quarter will be mild, with a year-on-year growth rate of about 3.8%, lower than the 5% growth rate in the same period last year

domestic supply pressure remains unchanged. Reviewing the refined copper production since the first quarter of this year, we find that the actual increase in production is better than expected. On the one hand, it is due to the increase in the rate of reaching production of new smelting projects put into operation at the end of last year; On the other hand, the output reduction caused by the overhaul of domestic smelters is much lower than that in the same period last year. In terms of imports, the domestic value-added tax rate will be reduced from May, and the monthly difference between purchase and sales will be smaller by one percentage point to stimulate spot imports, adding that the increase in refined copper production is better than expected, and the domestic spot pressure is higher than expected

in the second quarter of this year, the pressure of refined copper destocking increased compared with the same period last year, but the impact of scrap copper on the refined copper market still needs to be considered. According to the import data of waste copper from January to February, the import reduction of waste 7 basically met expectations, while the increase of waste 6 imports mostly made up for the decline of waste 7, so that the copper content of waste copper imports in the first two months fell by only about 20000-30000 tons year-on-year. On the one hand, the copper price is still high and the waste electricity price difference is acceptable. On the other hand, the customs' inspection on the inclusion of waste category 6 is acceptable, which does not affect the normal customs declaration of goods. After entering March, with the decline of copper price and the narrowing of the price difference of copper scrap, the originally not loose supply of copper scrap began to be reluctant to sell, and the economic decline of copper scrap turned to increase the consumption of copper scrap

on the whole, domestic consumption gradually started in the second quarter, domestic inventory began to decline, and the widening price difference between refined and scrap copper is also conducive to refined copper consumption, and copper prices may usher in a wave of rebound. However, macro uncertainty will still limit its rebound height, and copper prices are expected to show wide-ranging oscillation

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