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Downstream market weak consumption in the copper market "tu…

Published:2013-04-15 20:27 Click:wait for……
summary:Downstream market weak consumption in the copper market turnaround difficult In advance to see the high point in the first half of the year and began to fall before the onset of the off-season. The industry believes that copper prices will...
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Downstream market weak consumption in the copper market "turnaround" difficult

In advance to see the high point in the first half of the year and began to fall before the onset of the off-season. The industry believes that copper prices will continue in the consolidation range low market price of copper is expected to rebound in the first half of next year out of the sharp decline in the remaining two months of this year.
September 2012 to the end of October, the domestic and international copper market failed to continue to rise, the price of copper is located in the high and volatile, and the center of gravity began to move down. London Metal Exchange (LME) three-month copper subject to rebound in mid-September high of $ 8,422 in 8000 to $ 8400 fluctuation in the last month, mid-October Powei. Domestic copper prices are subject to 60,507 yuan the shock down since mid-October to 55,000 yuan.
Positive measures of the world's major countries in early September triggered a rebound in copper prices magnitude of more than 10%, but not the busy season to become the largest market pressure. At the same time, the copper supply capacity is to be restored, copper concentrate processing fee recovery rate is 50%. The one hand, the increase in production, on the other hand, consumption is not busy, an increase in global copper inventories during the peak season, which gave the market pressure.
November copper consumption in the off-season, the possibility of general, the macro trend is not very clear, the price of copper out of the off-season market. September centralized bailout has been the policy of the city of early release, the end of two months, the European debt, the U.S. fiscal cliff, China's real estate does not relax the problem persists, the possibility of copper out of the off-season down market very large. Operationally, any recent rebound will be a good short selling opportunity, production-oriented enterprises should also be a corresponding do to sell hedge against inflation.
The global economy is not yet out of the woods
In early September, the world's leading countries again implement positive policies, especially September 6 ECB meeting launched an unlimited number of sterilized purchase debt (OMT) The details of the scheme, which makes the national bond yields to be suppressed, the European debt crisis in the short term remission. In addition, China approved trillion yuan on transportation projects is also a certain degree of confidence to the market. However, the global economy has not thus turned the corner, still a lot of problems.

The United States, although recent real estate began to stabilize, and growth, but the property market is still limited contribution to the economy, U.S. economic growth is more moderate. Although the unemployment rate down, but still well above normal levels, is noteworthy that recently the United States have cut fourth-quarter profit growth is expected, reflecting the U.S. economy is still in a moderate recovery. Of more concern is that the United States by the end of the fiscal cliff and the debt ceiling so that the economy is facing a huge threat, "fiscal cliff" will result in the loss of U.S. GDP to 1.5%, such as occurs, the consequences could be the rest of the world " destructive spillover effects, these are limited to U.S. corporate investment and confidence.

Europe, the second-tier national debt yield has been restrained, but fiscal consolidation and a still fragile financial system is still the biggest problem in Europe. The real problem is how to handle the less the relationship between the deficit and growth, the recent Spain have yet to submit the aid application, to the great uncertainty in the market, but in the other hand, even if the application is made a prerequisite for structural adjustment and reduced The deficit still difficult to get rid of the plight of the European economy in the short term.

China is representative of the Asian region, India is in the vortex of high inflation and low growth. Chinese CPI below 2%, but the growth potential has not been ruled out, particularly noteworthy is that the upward pressure on prices persists, excess capacity also need to continue to adjust, coupled with the potential impact of quantitative easing in the United States and Europe, China is difficult to put a massive economic stimulus policy.

The face of a global problem, October 8th International Monetary Fund (IMF) released the latest "Global Economic Prospects" report to global economic growth is expected to cut again, expected growth rates were 3.3% and 3.6% this year and next, compared with April The reports were down 0.3% and 0.5%, respectively. Developed economies, the economic growth rate will continue to decline, emerging markets and developing economies, growth will continue to slow down. Compared to April this year, the report forecast 2013 growth rate of developed economies reduced from 2.0% to 1.5%, the rate of growth of the emerging markets and developing economies reduced from 6% to 5.6%.

IMF forecasts global growth fell to less than 2% chance of 17%. This probability is reported in April forecast of 4%, even if uncertainty larger same period in 2011, only 10% of this data. IMF reminded the advanced economies will be a recession, emerging markets and developing economies will be a higher probability of low growth.

Overall, the global economy has not yet entered a virtuous circle, on the contrary, not when losing momentum. In order to avoid a double-dip recession, governments or the policy of the city to save the economy, the global economy is in decline is limited, lack of upward momentum embarrassment. Consumption of copper and copper price cycle is closely related to the economic cycle, when the global economy is not yet out of the woods and not out of the clear trend, the copper market is difficult to get out a clear direction.
China's copper consumption weak

Macroeconomic unknown, the seasonality of the price of copper will be very obvious. September this year, copper prices rebounded 10%, but not busy in peak season for consumption of copper price reeled. China's copper consumption accounted for 40% of global consumption, but also the main source of growth in global consumption, the weakness of China's copper consumption played early season high copper prices.

Chinese copper stocks surge and exports out

In general, the copper market in mid-September to enter the peak season of consumption, but the weakness of domestic consumption industry as a whole this year, which makes it not only did the November holiday stocking phenomenon, Festival of replenishment is not evident. Since September, the domestic copper spot long-term maintenance premium, premium up to $ 380, this case and in March this year, April is quite similar.
In addition to the cash discount, domestic stocks increased significantly during the peak season and exports to the LME, which is also similar to March and April, weak domestic consumption, the global copper market under great pressure. As of November 3, three of the world stock exchanges reached 497,600 tons, an increase of 5.25 million tons compared with 445,100 tons in the end of August. The previous period inventories reached 197,900 tons, an increase of 3.9 million tons. LME stocks this year, mainly to decline from October has been found in a substantial increase in the phenomenon, in addition to greatly increased 1.37 million tons in South Korea on October 17, October 26, even in Belgium, Europe increased by 2.1 million tons This has attracted the attention of the market, this year's European supply tight spot to maintain the soaring water, a sudden increase in inventory at the end of that reflects the weakness of European consumer, it also cast doubt on the outflow of the hidden inventory. November 3, LME copper stocks increased compared to the end of August 7425 tons, the New York Mercantile Exchange (COMEX) copper stocks increased by more than 6,000 tons.

China's copper industry is not busy season obvious signs

China's largest copper consumer industries, electricity, according to the situation of the enterprise reflects the majority of enterprises are not as good as August, the traditional peak season is not obvious. This can also be displayed from the data released by the National Bureau of Statistics, the first nine months grid investment growth fell to 4.36% from 5.05% in May, this is the third consecutive monthly decline since June. But investment in power has been restored, the increase in the first nine months of -3.75% in the first eight months of -5.29%. The September copper rods and wires corporate average operating rate of 71.35%, a decline of 3.32%. Understanding of the situation from the industry point of view, in September, power lines and poles demand has gone up, but building wire, electric wire, magnet wire rods and wires demand has remained weak.

Chinese copper consumption in industry is the brass industry. It is understood that the 7,8 brass industry has been optimistic, even consecutive leave. August air conditioning production fell to its lowest level in two years. 9,10, air conditioning production rebounded slightly, but it is difficult to have a big increase, because on the one hand consumption of domestic appliances have been overdrawn, on the other hand, exports of, foreign economy continued to be weak, brass or brass downstream products shrink, this part of the order has always been difficult to have a breakthrough, coupled with still high inventory of domestic air-conditioning business, these are limited to the brass industry demand for copper. From the industry point of view, the policy of home appliances is about to expire in January 2013, the relevant ministries are brewing a new round of pro-consumer policy. The new pro-consumer policies may be introduced before the end of the year, but will focus on energy conservation and environmental protection subsidies for home appliances, small and medium-sized products, a conventional air conditioner, refrigerator, TV, and other large category or not be included. Due to the consumption of household appliances on copper above the air conditioning, so the new stimulus plan driven copper consumption will be limited.

Railway investment this year has once again become the focus of China's iron consumption, October 10, the Ministry of Railways issued the "2012 Sixth railway construction bonds prospectus disclosure, following the July 5, September 6, two additional railway investment , at present, the Ministry of Railways once again in this year's national railway investment in fixed assets increased by 200 million, so as to reach the level of 630 billion yuan, the value rose 22% compared with the beginning of the year 406 billion plan. At the same time, data released by the Ministry of Railways show that from January to September, the the completed railway fixed assets investment of 344.156 billion yuan, which means that in the last three months of this year, the Ministry of Railways assault completed nearly 300 billion yuan investment mandate, equivalent to the total and the first nine months. Rank among the cable railway power, real estate after. In addition, the increase in vehicle production in September fell to 6.3% decline for the second consecutive month increase.

Chinese real estate, the first nine months of this year, the national housing starts fell 8.6%, compared with 6.8% in the first 8 months continue to expand, while real estate investment growth continued to decline, at the same time, the domestic price rebound, which makes countries is difficult to change the attitude of real estate regulation.

Chinese consumer any significant improvement, at the same time, the the optimistic atmosphere on the international market is also limited. Although the U.S. construction industry has begun to rebound, but U.S. copper consumption in the proportion of the world less than 10%, Europe accounted for 15%, copper consumption in Europe the weak completely cover the recovery of the U.S. copper consumption. Europe's largest copper producer Aurubis said, because of weaker demand, the company cut copper products production this year. Copper strips and copper production year-on-year decline of 17% to 18% this year, a reflection of the decline in sales, flat rolled copper products production was flat compared with last year. The world's second largest refined copper producer Aurubis, the German construction industry this year, an increase of about 2%, which provided support for the European copper demand. Year ended September 30, Aurubis wire sales decreased by 20%; rod, sheet and plate sales were flat compared to the same period last year. Aurubis said that in early 2013, copper demand will not increase.