On September 10, spot copper was quoted at 5,2146.67 yuan/ton, up 0.1% from the previous day, up 6.35% from the beginning of the year, and up 11.54% year-on-year.
The fall of the US dollar and the rebound of US stocks boosted the market. LME copper closed up by US$49 overnight. China's industrial production continued to improve. TC remained low, indicating that the supply of raw materials continued to be tight, and copper prices rose slightly.
In terms of domestic demand, the home appliance, automobile and other industries are still in the stage of continuing to repair, and there is still room for improvement in the demand for cables. The cable companies surveyed generally report that the orders in the second quarter were very good, and the orders in the third quarter were slack, especially the order in August fell relatively significantly compared to the previous month. According to the current order situation, the companies generally believe that the peak season in September and October is not busy. Is more likely.
In terms of external demand, due to the impact of the epidemic and trade frictions, cable exports have declined significantly this year, mainly affected countries and regions such as Europe and the United States. As overseas epidemics are gradually controlled and stimulus policies gradually take effect, overseas orders are expected to Improve, but trade friction is still an uncertain factor.
On the supply side, copper, Peru’s main export product, has actually returned to the level before COVID-19, which is mainly reflected in the electricity demand of the country’s large mining companies. According to Jaime Gálvez, Deputy Minister of Mining in the Ministry of Energy and Mines of Peru, “The electricity consumption of large mining companies is a very good indicator of production. Although electricity consumption in August fell by 4.4% year-on-year, copper Mine power consumption has only dropped by 0.4%. It can be said that mining production has reached the level before the epidemic.
Based on the above situation, since the main force of domestic demand lies in cables and investment in downstream docking grids, the peak season from September to October is not prosperous at this stage, which will limit the following domestic destocking to a certain extent. There is still room for effort in the demand area. With the control of the epidemic situation, foreign demand is recovering, but the copper supply is gradually recovering, restraining the upside. Short-term copper prices may continue to fluctuate widely.
Related listed companies: Jiangxi Copper (600362), Tongling Nonferrous Metals (000630), Yunnan Copper (000878).
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