Copper prices have fallen in the short term, and the downside is expected to be limited

Recently, some of China's economic data has been unsatisfactory
.
China's real estate investment growth rate turned downward, and the growth rate of national real estate investment slowed to 7.
8% from January to October; The sales area of commercial housing also continued to decline, with the growth rate falling by more than 2 percentage points
from January to September.
At the same time, the growth rate of urban fixed asset investment and private investment in China fell in the first 10 months, and the data showed that the national fixed asset investment from January to October increased by 7.
3% year-on-year, down 0.
2 percentage points from January to September; private fixed asset investment increased by 5.
8% from January to October, down 0.
2 percentage points
from January to September.
However, the market believes that China's economic operation has generally maintained a stable trend, the quality of supply-side reform has continued to improve, and China's GDP growth rate is still expected to be 6.
8%-7%
in 2017.

Other major economies are doing well
.
The US PPI and core PPI in October both hit a year-on-year high since February 2012, indicating that inflation pressures in the United States have sprouted, the Fed's interest rate hike in December is basically certain, and the dollar index has fallen
sharply.
Strong domestic demand in Europe led the economic recovery, the euro area GDP growth rate in the third quarter was in line with expectations of 2.
5%, of which the year-on-year GDP growth rate of many ASEAN countries has continued to maintain about 3%, the EU raised the euro area economic growth forecast for 2017 from 1.
7% to 2.
2%.

The upward revision of global economic growth suggests that there are no risk events in the market, indicating that the base metal price trend is
upward.

From the raw material side, copper ore production is slow, and the supply of copper concentrate is tight
.
First, copper grades have declined, from 1.
6% to around
1% globally since 1990.
Among them, the large copper mine in Chile is seriously aging, and the grade decline is relatively obvious
.
Chilean copper is expected to average 0.
71% in 2017, below the global average
.
Secondly, the growth rate of copper mine capital expenditure has slowed down, and the level of copper mine capital expenditure in 2016 has decreased by about
60% compared with 2012.
Copper prices rose by more than 50% from the fourth quarter of 2016 to the end of the third quarter of 2017, but did not stimulate miners to significantly increase capital expenditure
.
Finally, negotiations between domestic smelters and foreign mines on copper concentrate long orders in 2018 are about to begin, but from the perspective of lower tender prices by traders, it is expected that the copper concentrate long single TC in 2018 will be up to $85/mt
.

From the perspective of China's copper terminal industry, the consumption prospects of copper are still optimistic
.
As of the end of October, the winning PPP projects nationwide have reached 8.
05 trillion yuan, and the newly traded projects in 2017 reached 3.
58 trillion yuan, of which municipal engineering, transportation, ecological construction and environmental protection industries contributed a large share
.

The supply of the real estate market will improve, and the proportion of affordable housing, co-ownership housing, and rental housing will increase
.
From the perspective of the power industry, the amount of copper involved in the bidding of the State Grid in the fourth quarter was significantly better than the same period last year, and it is expected that with the improvement of the construction industry, the consumption of wires and cables will continue to increase
.
In addition, the steady growth of the consumer goods industry as a whole also increased copper consumption
.

Overall, the overall global macro economy is good, indicating that there will be no major risks in the market, and base metal prices will maintain an upward trend
.
From a fundamental point of view, copper consumption is expected to recover faster than copper mine supply, which is conducive to the recovery
of copper prices.
At present, although affected by the bearish, copper prices short-term correction, but the space below will not be very large, it is recommended that investors wait for the price to stabilize, mainly to buy on the dip
.