1、 Trend analysis
According to monitoring data from Shengyi Society, copper prices slightly decreased in October. As of the end of the month, the copper price at the beginning of the month was 78933.33 yuan/ton. At the end of the month, the copper price fell to 76536.67 yuan/ton, with an overall decline of 3.04% and a year-on-year increase of 14.39%.
According to the Business Society’s current chart, most of the copper spot prices in October were higher than futures prices, and the main contract is the expected price two months later. The overall outlook for copper prices in the future is optimistic.
According to LME inventory, LME copper inventory fell from a high level in October. As of the end of the month, LME copper inventory was 276775 tons, a decrease of 7.8% from the beginning of the month.
Macroscopically, the Federal Reserve announced a 50 basis point interest rate cut to the 4.75% -5% range at its September meeting, and hinted at the possibility of further cuts within the year. This move is seen as a “precautionary” interest rate cut, fully in line with market expectations. Combined with strong consumption data in July and August, market confidence has significantly increased. The expectation of interest rate cuts has been fulfilled, and the loose cycle of the US dollar has begun, which is beneficial for non-ferrous metals in the long run.
Supply side: Copper and scrap copper imports have decreased month on month. The production in September was 1.004 million tons, with a year-on-year increase of 0.6% and a month on month increase of 0.2%. The capacity utilization rate was 81.61%. The cumulative production of electrolytic copper from January to September in 2024 was 8.865 million tons, a year-on-year increase of+32300 tons.
Downstream: Terminal demand: From January to September, the cumulative export volume of copper materials in China was 1.032 million tons, with a cumulative year-on-year increase of 38.3%. The apparent demand in September was 1.311 million tons, with a month on month increase of 7.3%. The production of air conditioners in September was 18.84 million units, a year-on-year increase of 16.9%, and the production of refrigerators in September 2024 was 9.63 million units, a year-on-year increase of 8.8%. The cumulative construction area of houses from January to September in 2024 was -22.3% year-on-year, and the cumulative completion area was -24.4% year-on-year. In September 2024, the production of new energy vehicles was 1.31 million units, a year-on-year increase of 48.7%. The cumulative photovoltaic output from January to September in 24 years was 425.16 million kilowatt hours, with a cumulative year-on-year increase of 12.1%.
Import: According to data from the General Administration of Customs, the import quantity of cathode copper in September was 323000 tons, a year-on-year increase of 73000 tons and a month on month decrease of -0.6 million tons. The cumulative import quantity of cathode copper from January to September 2024 was 2.648 million tons, a year-on-year increase of 161000 tons.
According to the annual price comparison chart of Shengyi Society, in the past five years, copper prices have mostly risen in November.
Based on the above situation, the spot TC of copper concentrate has rebounded but is still at a low level, and the contradiction between limited new mining capacity and expansion of smelting capacity is still unfolding. The purchasing sentiment of end customers tends to be cautious, maintaining a wait-and-see attitude. Raw material inventory is purchased according to demand, and there is little change in order performance, resulting in overall weakness. The Federal Reserve boldly cut interest rates by 50BP, and the tight balance between copper supply and demand provided strong support for copper prices. It is expected that copper prices will experience strong fluctuations in November.
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