For a period of time in the future, enterprises and institutions believe that copper prices will face a strong reality, weak expectations of the contradictory pattern, copper prices are expected to return to the early platform wide shock collation.
Fundamentals, spot is still tight. Output at Domestic smelters fell below 800,000 tons to 789,000 tons in October for the first time this year due to power cuts, cold shortages and maintenance, according to most companies and institutions. At the same time, due to the LME 0~3 liter water remains high after the National Holiday, many domestic copper smelters will increase export efforts in the fourth quarter. Currently, relevant export matters are in an orderly way, some smelters electrolytic copper has been offshore, and the overall inventory once again shows the trend of decline.
"Although copper consumption performance bright spot all have no, but the short-term supply side disturbance inventory is difficult to see significant growth, domestic disk base structure is difficult to see the potential of narrowing." Mr Ye said. However, "weak expectations" will still dominate the subsequent copper price, that is, the low global inventory is more of a short-term problem. In the context of the global epidemic, shipping logistics and containers are affected to varying degrees, and a large number of industrial and processed products are stuck in ports, resulting in the increase of global invisible inventory. But the global shipping crunch is expected to ease in the first quarter of next year as vaccines become more widely available, reducing the market's overhang of hidden stocks.
For next year, the view of copper prices from all walks of life more rational, and that the interval shock will be the main line. In terms of the global macro economy, the expectation of liquidity contraction in the United States strengthened, the appreciation of the DOLLAR, the absolute price of copper in DOLLAR terms fell, but not the depreciation of the United States currency, restraining the buying demand, also restraining the demand.
In addition, high inflation figures have left the market gripped by fears of economic "stagflation". The US consumer price index (CPI), released last week, rose 6.2% in October from a year earlier, beating expectations of 5.8% and 5.4%. It was the highest since November 1990. Joe Perry, senior economist at City Index, told reporters that preliminary data from the University of Michigan Consumer Reports showed consumer confidence at its lowest point in a decade.
The key is that the pattern of copper concentrate tension will gradually ease next year. China already accounts for half of the world's copper consumption, but the gap with its own supply of electrolytic copper has not been effectively fixed, meaning China needs to import a large amount of electrolytic copper from overseas every year, Mr. Ye told reporters. Over the past decade, China's self-sufficiency in copper concentrate has continued to decline and the imbalance between supply and demand has gradually deepened. China's self-sufficiency in copper concentrate has decreased from 40% in 2010 to 23.5% in 2021. To feed China's copper consumption, the country relies heavily on overseas raw materials. However, copper concentrate may turn surplus in 2022.
In addition, overseas demand may also slow down, the gradual recovery of manufacturing in developed countries in Europe and the United States, coupled with rising sea freight, export momentum weakened; Domestic demand, except for electronic industry, new energy, no obvious bright spot.
Domestic copper consumption is also expected to weaken. SMM predicted, "Since May this year, the cooling of new construction and completion of real estate, housing speculation is not strictly controlled, real estate can not support copper consumption in the long term. "Consumption, which has been boosted by exports since the fourth quarter of this year, is beginning to show pressure. The shortage of core will also affect the production of automobiles and the impact of household appliances." Ye jianhua said. Next year, the center of gravity of copper prices will move down, the overall operation around $8600 / ton.
However, in the long term, new energy demand will still be the main reason to support copper prices, electric vehicles, photovoltaic and other major drivers.
Mo Ke, founder and CEO of Zhenli Research, told reporters that there are two possible trends in the demand for electric vehicles next year -- one is likely to buy more and more, to stimulate the early release of demand; Second, higher prices are likely to affect demand. The first is more likely to happen. Technological advances in electric vehicle applications will accelerate next year, spurred by high costs.
