China Copper Weekly Review: The prospects for economic recovery are strengthened. Copper prices fluctuate at a high level this week (Week 11)

1. China's spot copper price trend this week

In the week of March 19, China's spot copper prices fluctuated at a high level. The average price of 1# copper was reported at 66960 yuan/ton, an average daily increase of 28 yuan/ton, and a weekly increase of 0.21%; the average price of the previous week was reported at 66146 yuan/ton, an increase of 814 yuan/ton compared with last week, an increase of 1.23% from the previous week .

Recently, the risk of strikes in South American copper mines has reappeared. The Los Pelambres copper mines in Chile agreed to extend the time for the strike mediation. The supply of copper ore is still in a tight state, and the processing fee for copper concentrates has fallen to the lowest level in a decade. Commodity trader Trafigura believes that there is a serious supply shortage in the copper market, and Chile's national copper company Codelco expects copper demand to continue to rise in the next three to four years.

China's refined copper production in the first two months increased by 12.3% year-on-year to 1.63 million tons. Recently, domestic and foreign inventories have accumulated. The current downstream market demand is still weak, and high prices inhibit downstream consumption. However, the traditional peak season is approaching, consumption improvement is still expected, and there are some structural changes in energy metal demand. Copper prices continue to fluctuate at a high level this week.

2. One-week trend of copper futures prices

Data show that Lun Copper fluctuated at a high level this week. The average price of LME copper in the first four trading days was US$9042.25/ton, an average daily drop of US$33.75/ton; the average price last week was US$8,997/ton, an increase of 0.50% from the previous month.

In the first two months of this year, China's economy continued to recover steadily, industry and exports grew rapidly, and investment and consumption recovered steadily. The Fed maintains its accommodative policy and sharply raised its forecast for US GDP growth this year to 6.5%, and the economic outlook has improved. The vaccination continues to advance, and the prospects for global economic recovery have strengthened, but the rise in U.S. bond yields has dampened market risk sentiment.

Shanghai copper continued to fluctuate this week. The average weekly settlement price of the current month contract was 66,920 yuan/ton, an average daily drop of 258 yuan/ton; the average price of the previous week was reported at 66180 yuan/ton, an increase of 1.12% from the previous week. Shanghai copper stocks continued to rise this week, increasing by 15,578 tons to 187,372 tons, an increase of 9.07%, and the cumulative increase in the past seven weeks reached 181.49%.

3. Lun Copper Week Inventory Situation

This week, London's copper stocks continued to increase, with a cumulative increase of 11,500 metric tons to 104,950 metric tons, a cumulative increase of 12.31%.

Fourth, hot finance at home and abroad

China:

1. According to data from the National Bureau of Statistics, in January-February, the national industrial added value above designated size increased by 35.1% year-on-year and 16.9% from January-February 2019. The two-year average growth rate was 8.1%, which was a relatively high level in recent years. The growth of industrial production is accelerating, and the equipment manufacturing and high-tech manufacturing industries are growing well.

2. According to data from the National Bureau of Statistics, the total retail sales of consumer goods from January to February was 6973.7 billion yuan, a year-on-year increase of 33.8%, an increase of 6.4% over the first two months of 2019, and an average increase of 3.2% over the two years. Market sales continued to grow, and sales of upgraded consumer goods grew rapidly.

International aspect:

1. United Nations Conference on Trade and Development (UNCTAD): Due to the strong momentum of the US economic recovery, the global economy will grow by 4.7% in 2021, compared with the previous forecast of 4.3%. In the United States, under the new round of fiscal stimulus measures, annual GDP is expected to recover 4.5%.

2. Japan’s total exports in February were about 6.03 trillion yen, or about 55 billion U.S. dollars, down 4.5% from the same period last year. The main factor was weak exports to the US and European markets. Imports in February increased by 11.8% year-on-year, turning positive for the first time in 22 months.

Five, copper market news of the week

1. Codelco, the world’s largest copper producer, said on Tuesday that it has obtained approval from regional environmental regulators to extend the service life of its Radomiro Tomic mine to 2030. This is an important part of Chile’s major plan to maintain production. component.

2. The Los Pelambres copper mine union under Antofagasta, Chile agreed to extend the time for mediation of the strike by 5 days until next week. Last week, members of the copper mine union voted 98.5% to reject the labor contract provided by the mine for the next 36 months, in favor of a strike.

6. Outlook for the copper price market outlook

The UNCTAD report stated that the global economy is expected to grow by 4.7% this year, which is faster than last year's expectations. Major economies have adopted monetary and fiscal easing policies and are expected to accelerate the promotion of vaccination, all of which have resulted in a faster recovery of the world economy. The prospects of EU countries are complex, and the orderly advancement of vaccines is expected to record economic growth. Otherwise, it will be seriously lagging behind, while the United States is expected to resume growth with the help of stimulus measures.

The UNCTAD report pointed out that China's economy has performed better than expected and is expected to grow by 8.1% this year. Positive factors for China's economic operation continue to increase, and the policy orientation to stably increase the bulk consumption of automobiles and home appliances has been clearly defined, and sales of new energy vehicles have increased rapidly. Fundamentally, the supply of copper ore is still tight, the cost of concentrate processing continues to fall, there are disturbances in South American copper ore, and the traditional peak consumption season is expected to remain unchanged, but the production of refined copper continues to grow, the inventory continues to accumulate, and the macro atmosphere is uncertain. The weekly copper price continued to fluctuate.