1、 Trend analysis
As shown in the figure above, in the first half of 2020, the copper market first fell and then rose, out of the “deep V” trend. According to the data of the business agency, the copper price at the beginning of the year was 49033.33 yuan / ton, then fell to 36560 yuan / ton on March 23, a decline of 25.44%. Then, it rebounded all the way to 48166.67 yuan / T at the end of June, almost fully recovered the previous decline, only a small drop of 1.77% compared with the beginning of the year.
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According to the current copper comparison chart of business society, the current trend of copper in the first half of 2020 is basically the same. The main contract price of copper from January to march is higher than the spot price of copper, and the spot price of copper from March to June is higher than the main contract price of copper. This phenomenon basically follows the law of copper price. The main contract price of copper is the expected price of copper in the next two months, and the next two months from January to March are the peak season of copper demand The price is higher than the spot price of copper. The next two months from April to June will be the off-season of demand, and the spot price will be better. In the middle of the year, the current price gap increased, indicating that we are bearish on the expected price of copper in the next two months.
2、 Market analysis
The copper trend in 2020 can be divided into two stages
In the first stage (from January to March, the price of copper fell from 49033.33 yuan / ton to 36560 yuan / ton, the lowest point on March 23, with a decrease of 25.44%. The main reason was that almost all domestic enterprises stopped production and shut down after the year, and the demand did not recover slowly until March.
In the second stage (rising from March to June), with the gradual control of the domestic epidemic situation, domestic enterprises gradually return to production and work, demand slowly recovers and prices rise. However, the epidemic situation abroad has become serious, resulting in frequent stoppage of foreign mines, affecting copper supply and supporting the rise of copper prices.
Summary of import volume of copper ore and concentrate from January to may in 2020
Total of January February March April May
The import volume of copper ore and its concentrate (10000 tons) 376.8 178 203 169.926.8
Year on year – 1.20% 1.03% 22.91% – 7.97% 14.77%
According to the table above, under the current epidemic situation, South America is affected by the virus and the import and export are blocked. In some months, the year-on-year decline has occurred. However, the import volume of copper ore in China has not changed much. In 2019, 22.02 million tons, 2.3 million tons more than that in 2018, an increase of 11.66% year-on-year. From January to may 2020, China’s total imports of copper ore will reach 9.268 million tons, an increase of 14.77% year-on-year.
New production capacity of copper smelting
Year crude refining total
95.110.205 in 2018
79 122 201, 2019
2020 43.64.107
According to the above table, in 2020, the copper smelting capacity will be significantly less than that of the previous two years. According to the Ministry of industry and information technology, the excessive risk of smelting will increase in 2020, and the disorderly expansion of copper refining capacity will be strictly controlled.
Monthly copper production
According to the above figure, the output and supply of enterprises are relatively stable. According to the data, in April 2020, the total production of domestic electrolytic copper smelting was 81.975 tons, while in May, the copper production increased to 353000 tons, an increase of 19.97% year-on-year. There is no need for the market to worry about the supply problem.
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Downstream demand:
Real estate completion
As shown in the above figure, the real estate market has declined since November 2017, with a decline rate of 2.9% from January to April 2020. The previously hyped interest rate and reserve rate reduction is good for real estate, but its effect is limited. The future real estate market will be stable.
Car production
As shown in the figure above, the automobile output in May reached 2187000, an increase of 18.34% over the same period of last year. The automobile data is better, but the replaceability is still the most worried problem in the market, and the impact of automobile data on the copper market in the future will be small.
Power grid investment
As shown in the figure above, in 2020, the State Grid initially plans to invest 450 billion yuan in power grid, which can effectively drive more than 900 billion yuan of social investment, and the overall scale will exceed 1.3 trillion yuan.
To sum up, although affected by the epidemic situation, the shutdown of foreign copper mines has more or less affected the supply of copper mines, but from the data, it can be seen that the actual import volume of China has not decreased but increased, the copper production has not been affected, and the new production capacity of copper smelting has decreased, but the overall copper market supply has little impact. In terms of demand, the investment demand data of automobile and power grid are better, but the data of real estate market from January to April is declining. It can be seen from the spot copper price that due to the influence of the epidemic situation, the resumption of production and work of domestic enterprises was delayed, resulting in the copper price falling first and then rising, and the recovery price in the middle of the year was slightly lower than that at the beginning of the year. Generally speaking, copper supply is stable and domestic demand is stable. Due to the spread of the epidemic in the international market, overseas orders have decreased significantly, and international demand has been affected. In the second half of the year, copper prices should still follow such a logic. In July and August, the price of traditional consumption will be slightly weak. In September and October, copper prices will pick up, and November and December will be weak.
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