April 2021 cable raw materials (copper) monthly report

First, the macro aspect

International aspect,

1.
U.
S.
retail sales rose 9.
8% month-on-month in March, versus 5.
8%
expected, the biggest increase since May last year.
CNBC noted that the U.
S.
economy continued to get a boost as the U.
S.
Congress agreed to an aggressive stimulus package, with a new round of stimulus driving a significant increase
in consumption in March.

2.
The Eurozone Industrial Sentiment Index recorded 10.
7 in April, a record high, 2 previously, 4 expected
.
The Eurozone Economic Sentiment Index for April was 110.
3, 101 prior, 102.
2
expected.
Some progress has been made on vaccines in recent weeks, and there is hope
for a strong rebound in the second half of the year.

3.
US real gross domestic product (GDP) grew by 6.
4% annualized in the first quarter of 2021, compared with 6.
6% expected and 4.
3%
in the previous month.
With widespread vaccination and economic stimulus packages, consumption and business investment have increased significantly, and the U.
S.
economy has begun to function
normally.

4.
The World Bank forecasts that global commodity prices are expected to remain near
current levels in 2021 after recovering in the first quarter.
The average energy price in 2021 was more than one-third higher than in 2020, with an average oil price of $56/barrel; Metal prices are expected to increase by 30% compared to 2020; Agricultural prices are expected to rise by nearly 14%
from 2020.

Domestically,

1.
According to data from the National Bureau of Statistics, preliminary accounting shows that the GDP in the first quarter was 2,4931 billion yuan, an increase of 18.
3% year-on-year at comparable prices, affected by incomparable factors such as the low base of the previous year and the increase in employees' local New Year working days; The month-on-month growth was 0.
6%, and the two-year average growth rate was 5.
0%, indicating that China's economy has recovered
steadily.

2.
According to the NDRC, it will step up the promotion of the top-level design of carbon peaking and carbon neutrality, and work with relevant departments to study and formulate action plans for carbon peaking and implementation plans for different industries and fields; Increase the intensity of scientific and technological research and promote major breakthroughs
in green and low-carbon technologies.

3.
According to data from the National Bureau of Statistics, from January to March, the total profit of industrial enterprises above designated size in the country increased by 1.
37 times year-on-year, an increase of 50.
2% over January-March 2019, and an average increase of 22.
6%
in two years.
In the first quarter, the profits of industrial enterprises continued to recover rapidly
.

4.
According to data from the National Bureau of Statistics, in April, China's manufacturing purchasing managers' index (PMI) was 51.
1%, 0.
8 percentage points lower than the previous month, still above the critical point, higher than the same period in the past two years, and the manufacturing industry continued to maintain an expansion trend
.

Second, the market review

Copper prices rose all the way this month, London copper once broke through the $10,000 mark, Shanghai copper hit a new annual high, the main force rose from 65,000 to 73,000, closing at 71,890 points, a monthly increase of 9.
59% or 6,290 points
.
However, it is worth noting that with the high price of copper, there is a restraint
on the actual consumption of the downstream.
Subsequent Shanghai copper may first enter a high shock cycle and further strengthen the market price recognition before it can perform
better.

The global economy recovered strongly after the epidemic, the US first-quarter GDP data hit a new high in recent years, the global green energy development trend was strong, coupled with the epidemic disturbance in Chile and the long mine development cycle, the increase in market demand for copper and tight supply expectations supported the high copper prices
.
At present, the Fed still maintains a relaxed attitude towards inflation, stimulating market confidence with the arrival of the May Day holiday stocks, pushing copper prices to hit nearly a decade high
.
However, it is worth noting that with the high price of copper, there is a restraint
on the actual consumption of the downstream.
Follow-up Shanghai copper may first enter a high shock cycle, further strengthen the market price recognition before better performance, the medium and long-term copper market to maintain the preference outlook
.

In terms of the market, spot copper soared by 6530 yuan this month, and the premium rose first and then fell, and the good copper remained around 80 yuan at the end of the month
.
The market rebounded again after finishing in April, and the profits of downstream processing were affected by the surge in raw materials, and once stopped and watched, but the market bullish sentiment before the holiday was heavier, and the replenishment of inventory between 7.
1-72,000 was more obvious, resulting in signs of narrowing the discount at the end of
the month.
In terms of import profit and loss, the US dollar returned to the downtrend, copper prices were strong outside and weak inside, the import window was closed, and the gap expanded from 300 yuan / ton at the end of last month to nearly 1,000 yuan
now.

3.
Waste market

Copper prices have fluctuated upward this month, rising all the way since the 1st low open, and the current Shanghai copper 2105 contract fell 71640 yuan / ton
.
Spot copper rose 6530 yuan / ton compared with the end of last month, scrap copper rose about 4800 yuan / ton, and Foshan high-quality bright copper reported 63900 yuan / ton
.
The fine waste difference rose from 2400 yuan / ton at the end of last month to 3900 yuan / ton, and the copper scrap advantage is obvious
.

This month's copper scrap soared by nearly 5,000 yuan / ton, and market shipments increased
significantly.
Copper prices rose strongly, and the market rose too fast, which also caused market decline fears, and the phenomenon of blocking the market has been reduced
.
At present, the price of scrap copper on the market has been adjusted several times within the day, and the north-south price difference is also narrowing, and the holders take advantage of the high price to actively ship, and by the end of the month, the inventory of the merchant has been very limited
.
Downstream low-oxygen copper rod and copper rod orders have rebounded significantly from before, and in the early stage of the price increase in the middle and late part of this month, the downstream is optimistic about the future market and has stocked up
.
Cable orders were suppressed by high prices, and profits were further compressed
.
By the end of the month, downstream enterprises in various regions have completed holiday stocking
.

It is understood that in the middle of this month, due to environmental protection inspections, some areas of Jiangxi have stopped production and some sources have been rejected
.
Scrap copper supplies poured into Hubei, Hunan and other regions
.
By the end of the year, Jiangxi's environmental protection had eased, prices rose sharply, and a large number of goods
were absorbed.
Jiangxi Shangrao arrived this month with bright copper from Japan, but the amount is not very large
.
As the import channel gradually smoothens, the subsequent will ease the tight domestic supply, and it is reported that Jiangxi Copper canceled the plan of Malaysia's recycled copper processing base, mainly due to local policy changes, only allow the import of high-quality scrap, similar to China
.
Visiting the Foshan area, I found that the supply of scrap copper is indeed very large and the competition is also very strong
.
Shipments are mainly based on manufacturers' self-pickup, profits are generally low, and small profits are sold as the principle
.

4.
Trend forecast

This month, Shanghai copper hit a new annual high, and the post-high shock stabilized
.
The Fed maintained a dovish tone, the dollar returned to weakness, loose monetary policy continued, inflation remained the main driving force for the rise in commodities, while global manufacturing PMI data maintained expansion, and crude oil and non-ferrous metals performed brightly this month under the expectation of improvement on the consumption side; From a fundamental point of view, driven by the peak season, the destocking of the previous period is approaching, carbon neutrality, new energy has new incremental expectations for the follow-up copper demand side, supporting medium-term copper prices, while domestic smelters have a centralized maintenance plan in May, and short-term copper prices are expected to have strong performance
after a new high adjustment.

5.
Industry news

1.
Codelco, the world's largest copper producer, reassured the market, saying a new lockdown in Chile would not disrupt copper supplies
.
Despite the surge in coronavirus infections in Chile, Codelco increased production
in the first quarter through various methods.

Serbia Zijin Copper plans to invest US$408 million in 2021, up from US$360 million in 2020, to fully integrate and expand its 4 mines and 1 smelter, and improve environmental protection
in the polluted Bor region of eastern Serbia.

Turquoise Hill Resources said Mongolia's Oyu Tolgoi mine has partially resumed shipments
to China.
Last month, the Canadian miner announced force majeure on some Chinese contracts due to
COVID-19-induced restrictions.

4.
Union workers at Escondida, northern Chile, the world's largest copper mine, will begin negotiating
a new collective contract in June.
The existing contract with the Operators and Maintenance Workers union expires Aug.
1
.
Escondida produced nearly 1.
2 million tonnes of copper in 2020, almost double the output of Collahuasi
, the world's second-largest copper mine.

5.
Recently, Luoyang Molybdenum announced that the company has reached an all-round strategic cooperation
with CATL on new energy metals.
At the same time, the latter will invest in the former's Kisanfu project in the DRC through its holding company, and the two parties will jointly develop this world-class copper-cobalt mine
.
The mine has a total resource of approximately 365 million tonnes of ore and contains more than 6.
2 million tonnes of copper and more than 3.
1 million tonnes of cobalt
.

6.
Indian giant Vedanta is looking for a new location to build a new copper smelter in the country because its plant in the southern state of Tamil Nadu has been closed for nearly three years
.
The company plans to build a copper smelter with an annual capacity of 500,000 tons and a potential investment of about US$1.
4 billion
.