1、 Trend analysis
| Gamma-PGA (gamma polyglutamic acid) |
According to monitoring data from Shengyi Society, copper prices first fell and then fluctuated at a low level in November. As of the end of the month, the copper price at the beginning of the month was 76515 yuan/ton. At the end of the month, the copper price fell to 73885 yuan/ton, with an overall decline of 3.44% and a year-on-year increase of 7.61%.
According to the Business Society’s current chart, copper spot prices in November were mostly higher than futures prices, with the main contract being the expected price two months later.
According to LME inventory, LME copper inventory fluctuated narrowly in November. As of the end of the month, LME copper inventory was 269475 tons, a decrease of 0.7% from the beginning of the month.
Macroscopically, on November 8th, the Federal Reserve adjusted the target range for the federal funds rate from 4.75% to 5.0% to a more relaxed range of 4.5% to 4.75%, a decrease of 25 basis points. The dust of the US leadership transition has settled, and Trump will take over. PCE increased by 2.1% year-on-year in September, slightly higher than the target, and there is no sign of progress in underlying inflation recently. In October, the US CPI increased by 0.2% month on month and 2.6% year-on-year, reaching a three-month high; The core CPI increased by 0.3% month on month and 3.3% year-on-year, which is higher than the 2% target set by the Federal Reserve.
Supply side: Entering the off-season of consumption in November, it is expected that domestic copper supply will continue to decline slightly month on month in the future. In terms of imports, although imported goods have gradually arrived, making spot supply slightly loose, domestic copper has received less.
Downstream: As the end of the year approaches, there is a certain expectation for downstream consumption to make a strong push. The decline in copper prices has significantly stimulated downstream consumption. However, the operating rate of recycled copper rods has decreased month on month, indicating that downstream demand has shifted to primary demand. At the same time, some copper rod enterprises engage in export grabbing behavior, but may overdraw future demand.
Import: According to data from the General Administration of Customs, the import volume of unprocessed copper and its products in China in October was 506000 tons, an increase of 5.6% from 479000 tons in September and 1.1% from the same period last year. In October, the import of refined copper was 386000 tons, an increase of 38000 tons compared to the previous month. The cumulative import from January to October was 3.234 million tons, a year-on-year increase of 7.8%.
According to the annual price comparison chart of Shengyi Society, in the past five years, copper prices have mostly risen in December.
Based on the above situation, the customs announced on the 15th that they would cancel the export tax rebate for copper materials, involving an export volume of about 500000 tons. The export of copper materials from January to September this year was 610000 tons, an increase of 19.6% year-on-year, which may indicate that there has been some rush to export. There will still be rush to export behavior this week, but the short-term decrease in exports in December may have a more significant impact. It is expected that there will still be an increase in imports in November and December compared to the previous month. In addition, large-scale refineries are expected to resume production in December due to accidents, and there is an expectation of increased supply in the later period. However, consumption is relatively weak, with a copper production of 1.967 million tons in October, a year-on-year decrease of 0.3%, and a cumulative production of 19.27 million tons, a year-on-year decrease of 1.1%. In years with weaker consumption, the impact of the off-season is more significant. In addition, traders and copper factories have stated that the demand for long-term orders will be weak next year, and downstream acceptance of long-term orders is not high due to the expansion of losses this year. It is expected that copper prices will mainly fluctuate weakly in December.
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