1、 Trend analysis
According to the monitoring data of the business agency, the copper price rose sharply in November, from 51528.33 yuan / ton at the beginning of the month to 57491.67 yuan / ton at the end of the month, with an overall increase of 11.57% and a year-on-year increase of 21.47%. After four months of high horizontal consolidation, copper prices began to rise rapidly to a seven-year high in late November. Copper has a strong metal attribute. After the recent U.S. election risk has gradually weakened, with the progress of the new crown vaccine and the optimistic expectation of overseas fiscal stimulus, copper prices have continued to rise.
According to the current chart of business associations, the spot price of copper in November was basically slightly higher than the futures price. The main contract is the expected price two months later, which shows that the market expected price is not so optimistic, but the price is very close, which shows that there is no need to be too pessimistic. The copper price is still relatively strong in the short term.
Domestic macro trend
The domestic epidemic situation control has achieved a key victory, the economy has recovered steadily, and various economic data have improved significantly. In October, the added value of China’s industries above designated size increased by 6.9% year-on-year, and is expected to increase by 6.5%. In addition to China’s accession to RECP, copper and its products are among the industries whose export growth rate is more than 20%. Therefore, the data is more optimistic.
Supply is still tight
As for copper concentrate, Chile’s president decided on September 11 to extend the national emergency law, which came into effect on March 18, for another 90 days from September 15. At present, the impact on production is still relatively limited, but the potential threat to transportation is still there. Moreover, with the rebound of copper price and the fermentation of epidemic situation, there have been continuous mine strikes in Chile since the end of the third quarter. Among them, a trade union of Lundin Mining Co., Ltd., located in the Candelaria copper mine in northern Chile, has accepted its proposed collective labor agreement for a period of 35 months. Previously, these workers have been on strike for more than one month. At present, all five unions in the mine have paid new salaries with them The contract was agreed. Although Peru’s production is steadily recovering, it is understood that its transportation links are still greatly affected. Moreover, the increase of overseas mines in 2021 is limited, especially in the first half of the year, copper concentrate may maintain a tight supply pattern, supporting the copper price.
| PVA 2088 (PVA BP20) |
The downstream market is optimistic
In terms of automobiles: in October, the production and sales of automobiles were 2.522 million and 2.573 million respectively, up 0.9% and 0.1% month on month, and 11.0% and 12.5% respectively year-on-year. As of November, automobile production and sales have been growing for seven consecutive months, of which the sales volume has maintained a growth rate of more than 10% for six consecutive months. From January to October, the production and sales of automobiles were 19519 million and 19.69 million, respectively, down 4.6% and 4.7% year-on-year, and the decline continued to narrow by 2.1 and 2.2 percentage points compared with January September.
Household appliances: according to the National Bureau of statistics, from January to October, the national real estate development investment was 11655.6 billion yuan, a year-on-year increase of 6.3%, 0.7 percentage points higher than that of January September. In terms of real estate development prosperity index, the real estate development prosperity index in October was 100.5, 0.08 points higher than that in August.
Household appliances: in October, China’s refrigerator output was 8.796 million units, up 25.8% year-on-year. From January to October, the cumulative production of refrigerators in China was 73.711 million units, up 4% year-on-year. In October, China’s air conditioning output reached 14.489 million units, up 0.2% year-on-year.
In terms of real estate, according to the National Bureau of statistics, from January to October, the national real estate development investment reached 11655.6 billion yuan, a year-on-year increase of 6.3%, 0.7 percentage points higher than that of January September. In terms of real estate development prosperity index, the real estate development prosperity index in October was 100.5, 0.08 points higher than that in August.
Overall, China’s auto market and home appliance market have improved significantly, and the real estate market has also continued to perform well. Moreover, at a recent meeting of the Ministry of Commerce, it was emphasized that next year will be the first year of the “14th five year plan”, so as to stabilize and expand automobile consumption and boost household appliances and furniture consumption. With policy support from the automobile industry and home appliance industry, it is expected that the performance will continue to improve, and copper demand will continue to be boosted.
Low inventory
In Shanghai Futures Exchange, copper stocks have fallen to 96766 tons below 100000 tons since September, the lowest level since December 2014. Copper prices were supported by lower copper inventories in LME warehouses, which have fallen more than 15% to 153, 175 tons since mid October. As of November 27, the copper inventory was 150775 tons, with a daily decrease of 1250 tons.
In view of the above situation, the macro level continued to improve and the fundamentals performed well, and this year’s Spring Festival holiday was late, and enterprises started work for a long time. Entering the fourth quarter, the automobile has ushered in the peak consumption season. Copper analysts believe that copper prices are expected to remain volatile in the short term.
| POLYVINYL ALCOHOL |