Copper prices are in a seasonal adjustment phase
As China’s central bank raised the deposit reserve ratio twice in less than half a month, three-month copper on the London Metal Exchange fell steadily after hitting a record high of US$8966/t on 11 November. After an integer mark of 70,000 yuan/t was blocked, a callback was initiated. At present, the copper price is in the seasonal adjustment stage, and there is strong support near the 60-day moving average in the short term. However, the adjustment is still not complete, and it is more likely to fall further in the later period. In the long run, the bottleneck of the global copper concentrate supply will remain. Before the fundamental improvement in the European and US economies, there will be no significant change in the global liquidity situation. The foundation of the copper price bull market is still firm, and after the seasonal callback is over, The probability of copper prices continuing to rise is higher.
Seasonal pattern is the internal factor that promotes copper price correction. The consumption of global copper is mainly concentrated in the northern hemisphere, and the consumption of copper in the northern hemisphere has certain seasonal rules. In each of the two peak seasons of spring and autumn, copper prices generally show a steady increase. After the end of the consumer season, the probability of copper price correction is higher.
Through an analysis of the global copper price trend over the past 28 years, it is not difficult to find that the seasonal trend of copper prices also shows a certain seasonal pattern. From February to early May of each year, copper consumption in the northern hemisphere is in the spring season, copper prices continue to rise sharply, and the largest increase in a year often occurs at this stage; after the spring peak ends until mid-June, copper prices often experience a A substantial adjustment; before the arrival of the peak consumption in autumn, the second round of annual increase in copper prices has begun. Generally from the end of June to September, the increase is usually less than the peak season of spring; after the end of the peak consumption in autumn, the price of copper will enter again. During the rest period, although the correction rate is not as good as the adjustment in May, the duration is often longer. At the end of each year, the stocking before the holiday also tends to give rise to a small rise, but the duration is short and the increase is limited.
On November 10, after the central bank announced that it raised the deposit reserve ratio, the copper market ushered in the winter adjustment market; on November 19, after the Shanghai copper rebounded to the downtrend channel, the central bank raised the deposit reserve for the second time in January. With a rate of 0.5%, copper prices have fallen again. Judging from historical laws, raising the deposit reserve ratio has little effect on the general trend of copper prices, but intensive upward adjustments in the short term will usually lead to longer-term adjustment of copper prices. The winter adjustment of copper prices will continue in December.
After the domestic regulatory policy made the price of copper weaker than that of the external disk after the central bank first announced raising the reserve requirement ratio in November, the ratio of domestic copper price to international copper price showed a downward trend. From the perspective of internal and external parity, this year's major trend is gradually lower, which is related to the appreciation of the ***, but also closely related to the tight monetary policy of foreign loose, the regulation of the domestic real estate market can not be ignored.
After entering the 21st century, China’s non-ferrous metals industry has developed rapidly, and the scale of production and consumption has continued to expand. It has become the world’s largest producer and consumer of non-ferrous metals. Copper consumption accounts for about one-third of global consumption, but copper production Only one-fifth of global production. Due to the uneven distribution of global copper resources, China’s copper resources are heavily dependent on imports. The self-sufficiency ratio of copper concentrates is only about 30%. “China demand†is the most important factor affecting the global copper price trend. This year, China’s domestic regulatory policies for the real estate market were unprecedentedly severe, and the impact on China’s copper consumption exceeded market expectations. China's copper production continued to decline after reaching 1,008,600 tons in June, and it was only 887,500 tons in October. Continued decline in November is a foregone conclusion. The decline in domestic copper production for six consecutive months shows that the impact of real estate control policies on domestic copper consumption exceeds market expectations. Not only did the copper production decline, but the volume of imports of related products also showed a downward trend. Monthly imports of copper ores and concentrates fell below 500,000 t. Imports of scrap copper and imports of unwrought copper and copper also decreased significantly. . The final consumption of copper is closely related to the real estate market. The control policies of the domestic real estate market have had a significant impact on domestic copper consumption. This effect is a long-term one and should not be overly optimistic about the growth of domestic copper consumption in the next few years. The positive impact of the "China demand" on copper prices has weakened. This is the fundamental factor that copper prices show external strength and weakness.
From the point of view of monetary policy, domestic inflationary pressures are increasing. Next year, monetary policy will undergo a major change. It is imperative to prevent inflation. From this point of view, the trend of future domestic copper prices should not be excessive. optimism. On the international front, inflationary pressures in the euro zone and the United States are modest. Promoting economic recovery remains the main task of monetary policy. In the first half of next year, the dollar supply of the market is still abundant, and the probability of international copper prices denominated in dollars continues to rise. External tightening of monetary policy will further aggravate the situation in which copper prices are strong, weak, and weak, and the downward trend in domestic and foreign prices will continue.
The slowdown in inventory declining trend pushes copper price corrections. Inventory changes are the most direct reflection of changes in supply and demand conditions in the copper market. Recently, the decline in the total copper inventories of the world's three major exchanges has slowed down, indicating that the copper market is in sufficient supply after the onset of the off-season.
As of November 26, Lun copper stocks stood at 357,000 tons, COMEX copper stocks at 72,500 short tons, and Shanghai copper stocks at 122,600,000 tons. The world’s top three major stock exchanges had copper inventories totaling 545,000 tons. The downward trend has been Significant changes have taken place. After entering the month of October, copper stocks in the world's three major exchanges tend to be stable, and the total volume fluctuates around 540,000 tons. With regard to the slowdown in the decline in copper inventories on the Global Exchange, we believe that this is mainly due to the seasonal impact of consumption. At the same time, the slowdown in domestic consumption growth is an objective reason that cannot be ignored.
In December, due to the low consumption season in the northern hemisphere, we expect the possibility of an increase in copper inventories in the three major exchanges in the world. However, the growth rate should be limited and will not have a significant impact on the long-term upward trend of copper prices. After China’s copper imports improved in December, the rising trend of inventories will slow down. Currently in a sensitive period of domestic monetary policy changes, the seasonal adjustment of copper prices may continue until the preparation period before the Spring Festival.
Based on the above analysis, the current copper price is in a seasonal adjustment stage, and the probability of a further callback in December is greater. As the bottleneck of global copper concentrate supply still exists, although the growth rate of copper consumption in China has slowed down, the relationship between supply and demand in the copper market has not fundamentally changed. The copper price of the bull market has not yet been shaken and the long-term trend is still promising. If the magnitude of this round of adjustment is small, it means that the market supply and demand relationship is tight, and there is a greater probability of a sharp rise in the market next spring.
Seasonal pattern is the internal factor that promotes copper price correction. The consumption of global copper is mainly concentrated in the northern hemisphere, and the consumption of copper in the northern hemisphere has certain seasonal rules. In each of the two peak seasons of spring and autumn, copper prices generally show a steady increase. After the end of the consumer season, the probability of copper price correction is higher.
Through an analysis of the global copper price trend over the past 28 years, it is not difficult to find that the seasonal trend of copper prices also shows a certain seasonal pattern. From February to early May of each year, copper consumption in the northern hemisphere is in the spring season, copper prices continue to rise sharply, and the largest increase in a year often occurs at this stage; after the spring peak ends until mid-June, copper prices often experience a A substantial adjustment; before the arrival of the peak consumption in autumn, the second round of annual increase in copper prices has begun. Generally from the end of June to September, the increase is usually less than the peak season of spring; after the end of the peak consumption in autumn, the price of copper will enter again. During the rest period, although the correction rate is not as good as the adjustment in May, the duration is often longer. At the end of each year, the stocking before the holiday also tends to give rise to a small rise, but the duration is short and the increase is limited.
On November 10, after the central bank announced that it raised the deposit reserve ratio, the copper market ushered in the winter adjustment market; on November 19, after the Shanghai copper rebounded to the downtrend channel, the central bank raised the deposit reserve for the second time in January. With a rate of 0.5%, copper prices have fallen again. Judging from historical laws, raising the deposit reserve ratio has little effect on the general trend of copper prices, but intensive upward adjustments in the short term will usually lead to longer-term adjustment of copper prices. The winter adjustment of copper prices will continue in December.
After the domestic regulatory policy made the price of copper weaker than that of the external disk after the central bank first announced raising the reserve requirement ratio in November, the ratio of domestic copper price to international copper price showed a downward trend. From the perspective of internal and external parity, this year's major trend is gradually lower, which is related to the appreciation of the ***, but also closely related to the tight monetary policy of foreign loose, the regulation of the domestic real estate market can not be ignored.
After entering the 21st century, China’s non-ferrous metals industry has developed rapidly, and the scale of production and consumption has continued to expand. It has become the world’s largest producer and consumer of non-ferrous metals. Copper consumption accounts for about one-third of global consumption, but copper production Only one-fifth of global production. Due to the uneven distribution of global copper resources, China’s copper resources are heavily dependent on imports. The self-sufficiency ratio of copper concentrates is only about 30%. “China demand†is the most important factor affecting the global copper price trend. This year, China’s domestic regulatory policies for the real estate market were unprecedentedly severe, and the impact on China’s copper consumption exceeded market expectations. China's copper production continued to decline after reaching 1,008,600 tons in June, and it was only 887,500 tons in October. Continued decline in November is a foregone conclusion. The decline in domestic copper production for six consecutive months shows that the impact of real estate control policies on domestic copper consumption exceeds market expectations. Not only did the copper production decline, but the volume of imports of related products also showed a downward trend. Monthly imports of copper ores and concentrates fell below 500,000 t. Imports of scrap copper and imports of unwrought copper and copper also decreased significantly. . The final consumption of copper is closely related to the real estate market. The control policies of the domestic real estate market have had a significant impact on domestic copper consumption. This effect is a long-term one and should not be overly optimistic about the growth of domestic copper consumption in the next few years. The positive impact of the "China demand" on copper prices has weakened. This is the fundamental factor that copper prices show external strength and weakness.
From the point of view of monetary policy, domestic inflationary pressures are increasing. Next year, monetary policy will undergo a major change. It is imperative to prevent inflation. From this point of view, the trend of future domestic copper prices should not be excessive. optimism. On the international front, inflationary pressures in the euro zone and the United States are modest. Promoting economic recovery remains the main task of monetary policy. In the first half of next year, the dollar supply of the market is still abundant, and the probability of international copper prices denominated in dollars continues to rise. External tightening of monetary policy will further aggravate the situation in which copper prices are strong, weak, and weak, and the downward trend in domestic and foreign prices will continue.
The slowdown in inventory declining trend pushes copper price corrections. Inventory changes are the most direct reflection of changes in supply and demand conditions in the copper market. Recently, the decline in the total copper inventories of the world's three major exchanges has slowed down, indicating that the copper market is in sufficient supply after the onset of the off-season.
As of November 26, Lun copper stocks stood at 357,000 tons, COMEX copper stocks at 72,500 short tons, and Shanghai copper stocks at 122,600,000 tons. The world’s top three major stock exchanges had copper inventories totaling 545,000 tons. The downward trend has been Significant changes have taken place. After entering the month of October, copper stocks in the world's three major exchanges tend to be stable, and the total volume fluctuates around 540,000 tons. With regard to the slowdown in the decline in copper inventories on the Global Exchange, we believe that this is mainly due to the seasonal impact of consumption. At the same time, the slowdown in domestic consumption growth is an objective reason that cannot be ignored.
In December, due to the low consumption season in the northern hemisphere, we expect the possibility of an increase in copper inventories in the three major exchanges in the world. However, the growth rate should be limited and will not have a significant impact on the long-term upward trend of copper prices. After China’s copper imports improved in December, the rising trend of inventories will slow down. Currently in a sensitive period of domestic monetary policy changes, the seasonal adjustment of copper prices may continue until the preparation period before the Spring Festival.
Based on the above analysis, the current copper price is in a seasonal adjustment stage, and the probability of a further callback in December is greater. As the bottleneck of global copper concentrate supply still exists, although the growth rate of copper consumption in China has slowed down, the relationship between supply and demand in the copper market has not fundamentally changed. The copper price of the bull market has not yet been shaken and the long-term trend is still promising. If the magnitude of this round of adjustment is small, it means that the market supply and demand relationship is tight, and there is a greater probability of a sharp rise in the market next spring.