1. Trend Analysis

According to SunSirs monitoring data, the initial copper price fell endlessly in 2020, falling to the lowest point of the year, 36,560 yuan / ton (March 23), a drop of 25.44%, and then bottomed out. After April 14, the copper price rebounded 14.87% To 41,995 yuan / ton.

The spot copper price on March 23 reached a low of nearly ten years, close to the lowest point of September 2016. The current copper price level is equivalent to the price level of November 2016.

According to SunSirs' chart, the prices of spot copper and copper main contracts are very close. Most of the past month, spot copper prices are slightly higher than the main contract prices, indicating that everyone is not so optimistic about the future copper price, nor is it particularly pessimistic.

Copper mine supply cuts, copper prices rebound

Blockade measures by Peru and other copper-producing countries reduce supply or interrupt logistics. MMG revokes production guidelines for the Las Bambas copper mine in Peru in 2020. The transportation of copper concentrate has been suspended. The copper mine in Antamina, Peru, was shut down for two weeks due to COVID-19. The mine's copper output in 2019 was 448.59 million tons. Supply cuts have caused copper supply concerns. However, domestic refined copper output rebounded in March, according to survey data, 22 sample companies produced a total of 665,000 tons of cathode copper, an increase of 2.6%.

List of Chinese smelters affected by COVID-19

Malaysian copper scrap export delayed

Malaysia extended the operation control order again until April 28. Factory operation is still restricted. It is expected that the recovery of scrap copper exports will be postponed. The substitution of refined copper for scrap copper is also expected to increase.

Chinese Copper import and export are not affected

The General Administration of Customs announced the import data of unwrought copper and copper in March 2020. Statistics show that China's imports of unwrought copper and copper in March amounted to 441,926 tons, an increase of 13% year-on-year. The cumulative imports from January to March this year were about 1.28 million tons. From January to February, it was 846,107 tons. In March 2019, China's imports of unwrought copper and copper materials were 391,000 tons, and the cumulative imports from January to March last year were 1.18 million tons.

Domestic demand picks up, but exports are hit hard

After the domestic resumption of production, there was a certain recovery in demand, but the overseas COVID-19 worsened, causing a second impact on manufacturing demand, especially the export of home appliances and electromechanical products was hit hard, or there may be about 650,000 tons of potential demand impact. New infrastructure investment has a certain effect on copper consumption. New infrastructure projects such as 5G networks, UHV, intercity high-speed railways and urban rail transit, and new energy vehicle charging piles, etc., according to the planned investment in 2020, respectively drove copper consumption of 25,000 tons, 100,000 tons, 20,000 tons and 09,000 tons, totaling about 154,000 tons, accounting for about 1.4% of domestic copper consumption, the actual proportion is limited.

The terminal industry is greatly affected by exports

In March, automobile production and sales dropped sharply year-on-year. On the one hand, export-oriented companies faced a three-month to six-month shutdown, and employee income fell, affecting some automobile consumer groups. On the other hand, the export of Chinese brands of automobiles and parts was blocked. In terms of home appliances, the export orders of many air-conditioning companies in March were directly cancelled by overseas merchants, and the peak season for traditional air-conditioning sales in April-May will be defeated.

Outlook outlook

Based on the above situation, the copper analysts of the non-ferrous branch of SunSirs believe that copper prices have rebounded continuously, on the one hand, because the news that copper mines have reduced production or even interrupted production has increased, which has increased market concerns about copper supply, and copper prices have risen; Resumption of domestic production and production, part of the domestic demand has been restored, the country's new infrastructure also has a certain boost. However, as the overseas COVID-19 continues to ferment, it not only affects the supply of foreign copper mines, but also affects domestic terminal exports and thus affects copper demand. Although the London Metal Exchange (LME) was closed on Monday and London Copper opened sharply in the morning on the 14th, it is difficult to say that the market has reversed when demand is not optimistic. It is expected that copper will still be supported by the interference of copper mine supply in the short term, and the demand will also be affected. The specific rise and fall are generally moderate, and the price is expected to fluctuate between 40,000-44,000 yuan / ton.

Related listed companies: Jiangxi Copper (600362), Tongling Nonferrous Metal (000630), Yunnan Copper (000878).

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