1、 Trend analysis
| Thiourea |
According to monitoring data from the Business Society, copper prices first fell, then rose, and then fell in April. At the beginning of the month, copper prices were 69680 yuan/ton, and at the end of the month, copper prices fell to 67573.33 yuan/ton, with an overall decrease of 3.02% and a year-on-year decrease of 8.60%.
According to the current chart of the Business Society, copper futures prices in April were generally higher than spot prices, with the main contract being the expected price in two months, and the overall copper market in April was bearish. Towards the end of the month, the main basis has increased, which is a bearish scenario for buying and hedging.
According to LME inventory, LME copper inventory fell first and then opened in April, which corresponds to the rise and then fall of copper prices in April, and overall inventory is still at a historical low.
Macro aspect: In April, the overall overseas economic data was bleak, with the US CPI in March lower than expected and the PPI in March growing by 2.7% year-on-year, lower than expected. As the May interest rate meeting approaches and expectations for a 25 basis point rate hike continue to rise, the market is gradually starting to price the Federal Reserve’s interest rate cut to be later than market expectations.
In terms of supply: The disturbance in the supply side of raw materials has decreased, the supply of copper concentrate is loose, new domestic production capacity has been put into operation, some smelters have been overhauled but raw materials have been replenished in advance, and the overall output is still increasing. In March, China’s electrolytic copper production reached 951400 tons, an increase of 43600 tons compared to the previous month, a growth rate of 4.8%, a year-on-year increase of 12.1%, and an increase of 1900 tons compared to the expected 949500 tons. It is expected that China’s electrolytic copper production will reach 953900 tons in April. Processing fees have rebounded from a decline, and although some smelting enterprises have undergone maintenance, the supply of raw ore and cold materials is sufficient, and the smelting output remains high.
In terms of demand: March April is the traditional peak season for consumption, but the copper rod operating rate has continued to decline recently, and the overall copper material operating rate has not exceeded seasonal performance. Real estate shows a recovery, but recently there has been a decrease in home viewing. Considering lag, subsequent transactions may slow down; New energy vehicle companies have overdrawn their demand for raw materials due to subsidies for accelerating work before the recession, and the reduction in fuel prices has also suppressed some new energy consumption. The slowdown in new energy has affected the demand for copper foil and some copper rods; Air conditioning has high emissions but needs to be verified. After experiencing a sharp decline in copper prices in March and a brief surge in downstream orders, subsequent consumption was overdrawn in advance. After mid April, new orders significantly weakened, and there is a risk of further weakness in the future after entering the off-season.
Based on the above situation, in April, copper supply increased and overall demand was relatively strong, showing a sluggish peak season. High prices of copper continue to suppress demand performance, and the actual consumption power of the spot end has recovered less than in the first quarter. Downstream buying is not strong, spot trading is stagnant, and copper inventory destocking has slowed down. In May, entering the traditional consumption off-season, copper prices are expected to fluctuate weakly in May.
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