December 2022 cable raw materials (copper) monthly report

First, the macro aspect

International aspect,

1.
Bank of Canada Deputy Governor Kozicki said that the central bank's interest rate policy path was changed from "how much to raise interest rates" to "whether interest rates still need to be raised"; Inflation remains too high and will take some time to return to 2%; Be prepared to take strong monetary policy measures if inflation unexpectedly rises; Need to see the demand slowdown continue; Future rate hikes will depend on economic data
.

2.
The Federal Reserve's Williams said that the US unemployment rate is expected to rise from 3.
7% to 4.
5%-5.
0% by the end of 2023; Inflation is expected to fall to 5.
0%-5.
5% by the end of 2022 and 3.
0%-3.
5% by the end of 2023; The economy is expected to grow
modestly this year and in 2023.
According to a survey released by the World Large Business Institute, a private research organization, the US consumer confidence index, also known as the Chamber of Commerce consumer confidence index, rose to 108.
3 in December than expected, the highest level since April, economists expected 101, and the confidence index was revised up to 101.
4
in November from 100.
2.
The survey also showed that the Consumer Expectations Index, a measure of consumers' outlook for the next six months, rose to 82.
4 in December, the highest since
January.

3.
The ECB raised all three major interest rates by 50 basis points, in line with market expectations, and the level of interest rates reached the highest
level since December 2008.
The refinancing rate rose to 2.
50%, the marginal lending rate was 2.
75% and the deposit rate was 2%.

Domestically,

1.
According to data released by the National Bureau of Statistics on the 15th, the added value of industries above designated size increased by 2.
2% year-on-year in November; From January to November, the national fixed asset investment (excluding rural households) increased by 5.
3% year-on-year; From January to November, the national real estate development investment was 123863 billion yuan, down 9.
8% year-on-year; Total retail sales of consumer goods in November fell 5.
9%
year-on-year.
According to data from the National Bureau of Statistics, from January to November, the national fixed asset investment (excluding rural households) 520043 billion yuan, an increase of 5.
3%
year-on-year.
Among them, private fixed asset investment 284109 billion yuan, a year-on-year increase of 1.
1%.

From a month-on-month perspective, fixed asset investment (excluding rural households) fell by 0.
87%
in November.

2.
The national financial work video conference was held
in Beijing.
The meeting stressed that the proactive fiscal policy in 2023 should be strengthened and improved
.
Give play to the role of fiscal stability in investment and promote consumption, strengthen the guidance and driving of government investment to the whole society, promote the recovery and expansion of consumption, strengthen the stabilization of foreign trade and foreign investment, and focus on expanding domestic demand
.

3.
The National Health Commission issued an announcement to rename the novel coronavirus pneumonia to the new coronavirus infection; With the approval of the State Council, starting from January 8, 2023, the prevention and control measures for Class A infectious diseases stipulated in the Law of the People's Republic of China on the Prevention and Control of Infectious Diseases adopted for novel coronavirus infection will be lifted; Novel coronavirus infection is no longer included in the management of quarantine infectious diseases stipulated in the Border Health Quarantine Law of the People's Republic of
China.

Second, the market review

Affected by the full liberalization of domestic epidemic prevention and control, the center of gravity of copper price operation in December moved upward, and as of 3 pm on the 30th, the main 2302 contract of Shanghai copper closed at 66260 points, a monthly increase of 2.
27% or 1470 yuan
.
Looking back, at the beginning of the month, various places gradually liberalized control, the epidemic entered normalization, and the second half of the year entered the first round of peak infection, the favorable expectations of liberalization continued to be digested, and the epidemic landing affected downstream consumption in the off-season, and copper prices showed a high and repeated trend
.

On the macro front, the Fed's interest rate hike landed, 50 basis points in line with market expectations, and the upper limit of interest rates was raised this round, but due to the slowing trend, the dollar continued to decline this month, but the decline also slowed down, and the impact on copper prices weakened
.
From a technical point of view, copper prices fluctuate steadily, the domestic Spring Festival is approaching, and the hype market may rise
.

In terms of the market, spot copper rose by 700 yuan in December, and the highest premium of good copper was 570 yuan / ton, and it was continuously lowered to near
the discount at the end of the month.
There has been no significant increase in inventory, and the rapid increase in the epidemic situation in East China near the end of the month has affected the abnormal list of downstream stocking intentions, delaying the replenishment time of some years ago, and it is expected that the premium will remain weak before the year
.
In terms of import profit and loss, the profit window of imported copper this month is basically closed, and the gap is on average 450 yuan / ton, in contrast, continue to attract domestic smelters to increase electrolytic copper export trade
.

At present, the end of the domestic year is approaching, the market as a whole will still enter the off-season, superimposed on the impact of the epidemic, the actual demand for terminals is weak, and the fundamental drive of copper prices is not strong
.
However, in the short term, the domestic macro environment is relatively favorable, real estate-related support policies have been introduced one after another, reopening to boost the later demand recovery expectations, coupled with the low copper inventory is difficult to improve in the short term, still support copper prices, it is expected that short-term copper prices will maintain a volatile pattern
.

3.
Waste market

Spot copper rose by about 700 yuan / ton in December compared with the previous month, and scrap copper rose by about
400 yuan / ton.
The difference in refined waste is around
1020 yuan.

In December, the Shanghai copper plate was volatile, at the beginning of the month, with the further relaxation of domestic epidemic control, various places gradually resumed normal operations, traders moved goods enthusiasm increased, trade fluency increased, market sources gradually recovered, downstream copper enterprises affected by profit margins, basically maintained just demand production, copper mill raw material procurement willingness increased, market trading atmosphere is relatively active
.
In the middle of the year, the market fell back, traders accelerated shipments, high shipments, and bagged for safety
.
At the same time, the procurement sentiment of downstream waste enterprises has been weak recently, and they just need to purchase to prepare
for the settlement at the end of the year.
When the epidemic broke out at the end of the month, some traders reduced the frequency of trade due to safety concerns or physical discomfort, which also had a certain impact
on the supply of goods in the market.

Towards the end of the year, the volume of scrap copper market decreased
.
Large traders and manufacturers feedback that there are difficulties in receiving goods in the near future, enterprises maintain just demand production-based, and it is expected that there will be an early risk of copper scrap processing in the future, and short-term downstream manufacturers still have some production intentions to raise the price of copper
scrap.
Copper fell and the degree of copper scrap increased to make up for the price difference of fine scrap, and the lack of supply caused by some of the short supply phenomenon supported the price of copper scrap, but on the other hand, the demand for refined copper decreased, and the processing fee of fine copper rod decreased more to pressure the price of scrap copper rod, and it is expected that it is difficult to significantly raise the price of scrap copper downstream, and it is expected to maintain the price pulling situation
in the short term.

4.
Inventory

In December, global copper explicit stocks increased by 08,000 tons to 273,000 tons from the end of the previous month; LME stocks decreased by 775 tons to 88,925 tons; domestic refined copper social stocks decreased by 16,000 tons to 97,900 tons from the end of the previous month; and social stocks in bonded areas increased by 28,100 tons to 54,700 tons
.
Inventories continued to decline slightly in December compared with November, which is also one of the fundamental factors for copper prices to maintain a high level, but there are some signs of accumulation in the market since late December, especially when domestic demand continues to weaken or enter the Spring Festival accumulation cycle, pay attention to the accumulation volume
.

5.
Industry news

1.
Foreign power news on December 1, Kazakhstan's largest copper producer, Kazakhstan (KAZ Minerals), reported that copper production in the first nine months of 2022 was 282,000 tons, an increase of 26%
from 224,000 tons in the same period of 2021.
Aktogay's copper production in the year ended September 30, 2022 reached 168,000 tonnes, up 64%
from 102,000 tonnes in the same period last year.
Andrew Southam, CEO of Kazakh Mining Company, said the company's performance in the first nine months of the year was excellent, with copper production increasing by 26%.

2.
Chile's Environmental Regulatory Authority (SMA) has filed charges against the Centinella copper mine in Antofagasta, located in the north of the country, for causing environmental damage
to water sources and local wildlife.
The violations range from "minor" to "very serious," and Antofagasta could pay a fine
of around $10 million.
The agency said Wednesday that one allegation described as "very serious" was failure to report or take the necessary steps to control and mitigate the effects
on Loa frogs.

3.
Foreign power news on December 9, global miner Anglo American Plc (Anglo American Plc) lowered the guidance level of copper production in 2023, affected by the decline in the grade of its Chilean mine
.
The London-listed miner expects total production to fall 3 percent
this year as the commissioning of Peru's Quellaveco mine and strong diamond production will only partially compensate for declines in production elsewhere.
The company added that production in 2023 is expected to increase by about 5%
compared to 2022.
The company said in its annual investor report that it currently expects its copper mines to produce between 650,000 and 660,000 tonnes in 2022 and between 840,000 and 930,000 tonnes in 2023, compared with previous estimates of 910,000 to 1.
02 million tonnes
in 2023.

4.
Foreign media news on December 14, the Chilean Copper Commission (Cochilco) lowered the 2022 copper price forecast to 3.
98 US dollars / pound, and lowered the 2023 copper price forecast to 3.
70 US dollars / pound; Chilean copper production is expected to shrink by 5.
8% to 5.
3 million mt in 2022; Chilean copper production is expected to increase by 7.
5% to 5.
7 million tonnes
in 2023.

5.
According to Zijin Mining, on December 20, Zijin Mining and Xanadu Mines Ltd.
officially signed the second and third phase investment agreements
for the acquisition of Mongolia's Hamagotai copper-gold mine project.
According to the agreement, Zijin Mining will further increase the project level to 45.
9% equity on the basis of the 9.
84% equity held at the listed company level, become the largest shareholder of the project, and lead the mine development and operation in the future, with an estimated total investment of about 43.
8 million US dollars.

The Hamagotai copper-gold mine is an advanced exploration project with an estimated ore volume of approximately 1.
1 billion tonnes, containing approximately 2.
93 million tonnes of copper and approximately 243 tonnes of gold, and has completed a rough study and is scheduled for open-pit mining
.

6.
Dec.
29 news: China's major copper smelters agreed at their meeting on Thursday to keep copper concentrate processing and refining charges (TC/RCs) unchanged in the first quarter of 2023, continuing to be at multi-year highs as global copper concentrate supply is expected to increase
, people familiar with the matter said.
TC/RC in the first quarter of 2023 will remain at $93 per ton and 9.
3 cents per pound in the first quarter of 2023, unchanged from the fourth quarter of 2022, but up from $70 per ton and 7 cents per pound in the first quarter of 2022
, people familiar with the matter said.
The China Smelter Procurement Group (CSPT) made the decision
via video conference on Thursday.
Participants said there would be no major changes
in fundamentals in the first quarter.