Copper prices continued to rise in the international market in January

In January, the price of LME copper for three months was generally high, but the volatility was considerable. The higher the price, the more fragile it becomes. A slight sign of trouble has caused a sharp fall, and it is difficult to continue to rise. It is often a small increase in the rate of decline.

1. Supply and demand relationship: According to the estimation data of CRU, the world's refined copper production in the first quarter of 2011 was 4.631 million tons, and the consumption was 4.764 million tons, with a deficit of 133,000 tons.

2. European market:

Early: At the beginning of the new year, there were few transactions in the European copper market, and the premium was still hovering at a high level. PLATTS reported that the Class A copper premium was still 100-105 US$/t, with the LME spot price as the base price. Rotterdam warehouse price. The price of CIF Livorno is also stable at 70-90 US dollars / t.

Late: Due to the significant reduction in demand and the increase in inventories, the copper premium in the European market dropped from 70 to 100 US$/t to 50 to 95 US$/t. In the European market, Class A copper premium water outside the Rotterdam Port does not exceed US$75/t, and the unconfirmed warehouse receipts trade has a premium of less than US$50/t. The source of the goods delivered to the LME warehouse seems to confirm the unexpected decline in copper consumption.

3, the United States market:

In the first half of the year, spot copper premiums in the US market remained at 6 cents per pound, with COMEX spot prices as the base price and delivery in the Midwest. At the end of 2010, it was 5-6 cents per pound.

Mid-term: The US copper market does not trade much, and the premium is generally maintained at 4 to 6 cents/lb, although the premium is determined by location and shipping costs. PLATTS reported a premium of 4.5 to 5.5 cents per pound, based on the COMEX spot price, delivered in the Midwest. The current spot premium is also similar to the 2011 annual premium. Everyone thinks that demand is weak in the first month of this year.

Late: The US spot copper market is under pressure because buyers in the processing industry have no intention of purchasing in the spot market. The spot premium is 4.5 to 6 cents/lb. Many buyers find that the annual ordering contract can meet the demand. Most of the potential buyers said that their orders have not increased and they do not need to purchase in the spot market. It is expected that the 2011 spot premium will rise, which may prompt some processing industry buyers to place orders under this year's annual supply contract more than usual, so as to avoid a tight supply situation. The higher market cost of downstream products will prompt the processing industry to keep its inventory of raw materials and finished products at a relatively low level in 2011. In January, the average delivery price of copper in March was 4.36 U.S. dollars per pound, up 30% from the average of 3.35 U.S. dollars per pound in January 2009. Some traders said that higher copper prices make buyers pay more attention to inventory. For companies, inventory at the end of the month is an important issue. Near the end of the month, everyone is planning for February's plan. So inventory will be as little as possible. Although some dealers have already confirmed the annual orders at a better price, they are surprised that there are not many spot transactions in the first few weeks of the year. Although there is overall downward pressure on the premium, in remote areas such as the northeast, if the buyer is eager for goods, the premium may reach 6 cents/lb, the midwest premium may be 5–6 cents/lb, and the southwest 5 cents/lb, or slightly lower. The level of premium also depends on the order quantity.

Some market participants said that before the first quarter will increase the number of transactions, perhaps to the March-March demand in the spot market will increase, the premium may rise significantly in March to April, when the supply is tight, the premium may rise To 9 cents/lb.

4. Copper Concentrate: According to the data of CRU, the global copper concentrate production in 2010 was 12.446 million tons, the smelting enterprise demand was 125.410 million tons, and the gap was 95,000 tons.

The largest copper smelter in Japan, Pan Pacific Copper, and a South American miner agreed on a 2011 copper concentrate processing fee agreement of US$80/t and eight cents/lb, compared with US$46.5 last year. /t4.65 cents/lb rose 72%. A large copper smelter in China reached an agreement with a Western miner. In 2011, copper concentrate processing fees increased by 51% on the basis of last year, ie, US$70/t7 US$/lb.

5. Domestic market: Customs data show that in 2010, China imported 2.9221 million tons of refined copper, down 8.37% year-on-year, imported copper alloy 60382t, up 14.3% year-on-year, imported copper scrap 4.436 million tons, up 9.16% year-on-year, imported copper concentrate 648.80 million tons, an increase of 5.54%, and 910,500 tons of imported copper, a year-on-year increase of 10.90%. The export of refined copper 38730t, a year-on-year decrease of 46.9%. The National Bureau of Statistics announced that China's refined copper production for the year 2010 was 4.793 million tons, an increase of 12.2% year-on-year, and copper ore (metal content) was 1.277 million tons, a year-on-year increase of 20.7%.

The output of copper processing materials in China has increased from 5.23 million tons in 2006 to nearly 10 million tons in 2010, and has increased nearly one-fold in five years. It has become the world’s leading copper producer, consumer, and international trading country. Its output has been ranked first in the world for eight consecutive years, and international trade has become more active. China Development Bank Anhui Branch and Tongling Nonferrous Metals Group Holdings Co., Ltd. signed a signing ceremony for the “12th Five-Year” plan cooperation agreement. Jiangxi plans to add 3 million to 5 million tons of copper metal reserves within five years.

6, the industry view: There is no discussion about the copper price will reach 11,000 US dollars or 12,000 US dollars. The ETFs are not as lively as originally thought, and their demand is not as strong. Although the future supply problems will have a great impact on the market, supply and demand are at least relatively balanced at present.

The Chilean Copper Commission stated that there will be enough copper stocks in the world and there will be no copper gaps. The committee expects global copper production in 2011 to be 16.5 million tons, an increase of 5.2%, and consumption growth of 6%. It is expected that copper consumption in China will increase by 5.3%.

7. Relevant policies: The world's largest copper mine, the Escondida copper mine in Chile, said it will accept the government’s new mineral tax plan. According to the new mining tax standards, the mining tax calculated based on revenue will be raised from the previous level of 2% to 4%. According to the new mining tax standards that the country’s copper producers can voluntarily apply, the copper producers’ mining tax will be at most 14% depends on its sales and global copper prices. Copper miners that have already adopted new mining taxes also include Antofagasta, Anglo American, Xstrata and Freeport-McMoRan Copper Gold. The Chilean government hopes to raise the mineral tax to raise more funds for reconstruction after the earthquake.

8, industry information: DJ-UBS and GSCI commodity index ** will begin to adjust the position of the commodity structure. It is estimated that the above two ** will significantly increase the positions of natural gas and zinc ingots, drastically reduce the positions of nickel, silver, coffee, cotton and corn, appropriately reduce the copper's open interest, and appropriately increase the aluminum's open interest.

Since October last year, three agencies have applied to the US Securities Exchange to launch the spot copper trading ETF**. The three institutions are JPMorgan Chase, BlackRock and ETF Securities. Among them, the spot copper ETF of ETF Securities has been listed in December 2010. Other investment banks are also interested in introducing plans for the spot copper ETF**.

Lundin Mining and Inmet Mining jointly announced on January 13 that they will jointly create a Canadian copper company worth 9 billion Canadian dollars, equivalent to 9.1 billion U.S. dollars. The Collahuasi copper mine will carry 20,000 tons of copper concentrate monthly through the port of Arica until its own port is repaired. In mid-December last year, an accident in Patache Harbor, a subsidiary of the Collahuasi copper mine, led to the declaration of force majeure in the shipment of copper concentrates. It is estimated that the port repair work will continue for 4 to 6 months. The Peruvian Cerro Verde Copper Mine has basically reached an agreement between the employers and employees (7 of the 9 disputes have been reached, and the remaining two will continue to be negotiated). The union announced the cancellation at the last moment before the election. The mine produces 310,000 tons of copper annually. Kazak's Bureau of Statistics in 2010 produced 323,428 tons of copper, an increase of 3.4% over 2009. Chile's State-owned Copper Council said that the country will produce 5.7 million tons of copper this year, an increase of 6.4% over 2010.