1、 Trend analysis

 

As shown in the figure above, the domestic copper market in 2019 shows a trend of first rising, then falling, then surging. According to the data monitoring of the business agency, the price of copper rose slightly in 2019. At the beginning of the year, the price of copper rose by 48160 yuan / ton, and at the end of the year, it rose by 48830 yuan / ton, or 1.39%. Looking at the trend of copper in the whole year, copper has been in a slight fluctuating and tepid trend. The highest price of the whole year is 50213 yuan / ton on March 21, and the lowest price is 45888.33 yuan / ton on July 10, with an earthquake amplitude of 9.4%, less than 10%. The overall price fluctuation is relatively small.

 

As shown in the figure above, according to the current copper comparison chart of the business agency, the current copper trend in 2019 is basically the same. Most of the time, the spot price is higher than the main contract price, indicating that everyone is not so optimistic about the copper price throughout the year. Except for the large gap between the current price in March, the difference between the spot price and the futures price is not much. With the rise of copper price at the end of the year, the main contract price is higher than the spot price, and the main basis is in a negative value, which is good for buying hedging.

 

2、 Market analysis

 

The copper trend in 2019 can be divided into four stages as a whole:

 

In the first stage (from January to March), the price of copper rose from 48160 yuan / ton in January to 50213 yuan / ton on March 21. On the one hand, the supply of copper was frequently disturbed. For example, the export license of copper concentrate in Indonesia Freeport expired, the production of cathode copper in Europe and Asia was expected to be reduced by 55000 tons. The smelters affiliated to Chuquicamata and Salvador mines in Chile will extend the maintenance time On the other hand, after the Spring Festival, the main copper rod enterprises have resumed production in succession; the operating rate of copper tube enterprises has increased steadily, the order volume has started to rise, the overall demand for copper has increased, and the price of copper has risen.

 

In the second stage (March July decline), due to the global economy, European and American data are weak, the ISM data of the United States in April is not as expected, the PMI of Germany continues to be depressed, the trade war affects, and copper consumption turns from the peak season to the off-season. Although copper supply is often disturbed, copper prices are still depressed.

 

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In the third stage (narrow range consolidation from July to November), there is no obvious change in the fundamentals of the copper market at this stage. The supply of mine copper and scrap copper is in short supply, but the demand is weak. Although the consumption peak season is in September, it is not in the peak season.

 

In the fourth stage (December’s rise), at the end of recent years, China US trade negotiations are close to reaching the first stage agreement. In November, the domestic copper import data is stable, inventory continues to decrease, the waste copper in the fourth quarter is exhausted and the supply is tight. In addition, after entering the fourth quarter, the sales situation of China’s automobiles and home appliances has improved, and the operating rate of wire and cable enterprises has increased significantly year on year. With the end of the year, the infrastructure investment has made great efforts , copper demand improved, and copper prices rose accordingly.

 

Copper import and export volume in 2009-2019

 

As shown in the figure above, from 2010 to 2013, the net import of copper increased year by year, from 2013 to 2018, the net import of copper decreased gradually, and in 2019, it recovered slightly. According to statistics, from January to October 2019, the copper import volume is 2585400 tons, and the export volume is 273600 tons. In 2019, the annual import volume is estimated to be 3102300 tons, and the annual export volume is 328300 tons.

 

2009-2019 global and Chinese copper production

 

As shown in the figure above, compared with 2018, the global copper production and China’s copper production have increased, and the global copper production has increased even more. Among them, from January to October 2019, the global copper output was 19.49 million tons, and from January to October, China’s copper output was 9.3972 million tons, up 8.1% year on year.

 

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Apparent consumption of copper in 2009-2019

 

According to the above figure, the apparent consumption of copper in China from January to October 2019 is 10.26 million tons, and the apparent consumption of copper in 2019 is lower than that in 2018.

 

Downstream operating rate:

 

Domestic copper terminal consumption is mainly concentrated in power cables, home appliances, automobiles, real estate and other industries. Among them, power cable accounts for nearly 37%, construction accounts for 21%, household appliances (air conditioning and other refrigeration equipment) accounts for 15%, and automobile industry accounts for 8%. As the intermediate transition product from electrolytic copper to the consumer terminal, the operation situation can reflect the downstream consumption situation. Copper material includes copper rod line, copper tube, copper strip, etc.

 

To sum up, the overall net import volume and output in 2019 are higher than that in 2018, but the apparent consumption volume is decreased, and the copper price is difficult to improve. In terms of copper fundamentals, there are frequent interferences from copper mines, and the downstream operating rate is acceptable. However, due to the economic depression, the overall copper price is tepid and tepid, and the annual earthquake amplitude of copper market is less than 10%. In 2020, the global economy is still in a downward cycle, still facing sluggish economic growth, and copper mine interference has never stopped. It is expected that copper prices will continue the trend of 2019 next year, rising in the spring and falling in the depression period, with the price range of 45000-51000 yuan / ton for the rest of the time.

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