After 2016 in the first half of 2017, copper, lead, zinc and nickel all rose first and then fell, and then on June 14 after the Federal Reserve announced the second rate hike this year, the emergence of a Wave rebounded quickly; aluminum prices rose, tin prices high and volatile. The prices of LME copper, aluminum, lead, zinc, tin and nickel were 6.91%, 12.98%, 14.25%, 8.30%, 8.13% and 6.36% respectively as of June 30, respectively. Gold and lead prices rose by 14.25% and 12.98% respectively, while prices of nickel and tin declined by -8.13% and -6.36%, respectively (from January 3 to 2017, respectively) June 30, 2017 closing price-based).
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Analysis on the Price Trend of Nonferrous Metals in the Second Half of
Copper: supply gap to support the formation of copper prices
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According to the International Copper Research Group (ICSG) released in April the latest forecast, 2017 global refined copper supply of 23.778 million tons, refined copper demand for 23.895 million tons, the global market shortage of 147,000 tons. ICSG in October 2016 issued a report that: 2017 global refined copper supply 23.79 million tons, the global demand for refined copper 23.63 million tons, the global market supply surplus of 163,000 tons. (Especially in the first half of 2017, the world’s major copper producers have ushered in the strike tide, the global copper supply has a significant impact in early February the world’s largest copper mine in Chile Escondida copper mine continued to strike more than 40 days , March Peru’s largest copper mine CerroVerde copper mine strike, the world’s second largest copper mine Grasberg copper mine has suffered from the Indonesian government to restrict exports and workers strike, the above event caused 2017 global copper ore supply reduced by about 300,000 tons) and Demand forecast increases, leading to a shortage of market expansion.
As a result of the fall in metal prices, global mining investment slowed, new mines put into production is less than expected, leading to slowdown in copper supply in recent years. Therefore, from the supply and demand level, copper fundamentals are good, and because the global economy to the better, copper demand will continue to grow, while the supply growth is slightly less than demand, supply gap to expand the formation of strong support for copper prices.
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Aluminum: supply side reform is expected to continue to push up aluminum prices
According to the International Aluminum Association (IAI) data, global electrolytic aluminum production in 2016 58.87 million tons, consumption of 59.6 million tons, the shortage of 730,000 tons; China’s electrolytic aluminum production 32.5 million tons, consumption of 32.7 million tons, shortage of 200,000 tons.
Global aluminum prices in 2005 experienced a sharp decline, resulting in lower than the cost of aluminum cash costs, in December 2015 14 domestic key electrolytic aluminum companies announced that production and commitment to no longer restart has shut down production capacity. Due to the high cost of restarting the electrolytic aluminum, the combined production reduces the short-term supply of electrolytic aluminum to a substantial reduction. China’s decline in production makes the domestic supply and demand changes, 2016 domestic aluminum prices rebounded, the highest spot aluminum prices rose to 15,580 yuan / ton, the largest rebound rate of 58%.
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As the electrolytic aluminum enterprises to improve profitability, since 2016, the Chinese market supply of aluminum slightly more than the demand for the month, while the world except for China outside the region, it is the majority of the situation in short supply of aluminum. On the other hand, once the domestic supply side of the reform and environmental protection and limited production in place, the supply shortage is expected to lead to the shortage of aluminum, the supply of aluminum on the one hand, The price of further rise.
Lead and zinc: supply and demand gap remains
The latest data released by the International Lead and Zinc Research Group (ILZSG) in April 2017 predicted that global zinc production in 2017 was about 13.7 million tonnes, up 9.8 percent from the previous year; refined zinc production was about 14.08 million tonnes An increase of 6.5%, refined zinc production growth is lower than the mineral zinc 3 percentage points. ILZSG expects global refined zinc demand to be 14.3 million tonnes in 2017, with a shortage of 226,000 tonnes, which remains short for two consecutive years, but is lower than the 2016 shortage.
Unlike zinc, lead production increased from 2016 to 2017. According to ILZSG forecast, global lead production in 2017 is about 4.92 million tons, up 3.6% over the previous year; refined lead production is about 11.391 million tons, up 1.4% over the previous year; global refined lead demand is about 11.339 million tons, supply and demand Basic balance.
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Experienced a sharp rise in the year 2016, the first half of 2017 lead and zinc prices continue to maintain the shock rose. Due to lead and zinc concentrate processing fees continued low, mining enterprises considerable profits, in March the mining enterprises have accelerated the release of production capacity, the first quarter of 2017 lead and zinc concentrate production increased slightly. According to statistics, 2017 foreign zinc concentrate production capacity is expected to 40 million -60 million tons, but the current can not be expected to recover in the first half of the zinc mine, the global concentrate supply is still tight. Therefore, the short term, the supply is still a gap, but with the high price of the operation, lead and zinc enterprises to increase profits, there may be resumption of production, supply shortage situation will gradually ease.
Tin: a slight increase in supply and demand, the price to stabilize the main
According to the International Tin Association (ITRI) statistics, 2016 global refined tin production of 3,413,000 tons, consumption of 3.522 million tons. The Malaysian Smelting Company (MSC) estimates that global refined tin production in 2017 is 3.497 million tonnes, with consumption of 3.551 million tonnes and a shortage of about 5,000 tonnes, which is less than the 2016 shortage. As the tin price is currently high, the mine is profitable, so the possibility of further reductions in the mine is small, and with the rebound in tin prices, the supply of recycled tin will also increase, on the whole, the supply of tin in 2017 more than 2016 years.
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Demand, China’s demand for tin accounted for the world’s leading position. In addition to the needs of other countries outside China remained at the current level, the global demand for tin growth is mainly in China. ITRI expects China’s tin consumption to grow by 12,000 tonnes by 2020, 1.6% compound growth and low growth rate. MSC estimates that global refined tin consumption growth is around 1% in 2017, with limited growth. Despite the limited growth and demand growth or less than the growth rate of production, but in 2017 the global refined tin is still a shortage, the price will be some support, but tin prices still need to get further release of demand.
Nickel: economic recovery to expand supply and demand gap
Since 2011, electrolytic nickel has experienced a five-year excess supply, nickel prices also continued to fall in 2016, the global nickel market into a stage shortfall, the first quarter of 2017, the supply and demand gap continued to expand, on the one hand, nickel ore supply reduction And the contraction of smelting production, on the other hand is the increase in demand. Short-term may be due to domestic steel industry environmental protection and other factors lead to decline in demand, in the long term, benefit from China’s all the way along the policy and the global economic recovery, nickel demand will be with the steel industry demand will also be improved Synchronous growth, so the nickel price is still room for recovery.
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In summary, due to the global economy continues to good momentum, the developed economies show growth momentum, domestic and foreign markets, non-ferrous metal supply and demand gap is still expected in the second half of the overall price of non-ferrous metals will show a strong trend.
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