Copper fundamentals and prospects in the second ha

Copper fundamentals and prospects in the second half of the year

the cycle of copper mine is the current hot spot of copper. From the statistical data of the cycle since 1960, it has entered a locked stage at present. Moreover, the copper mine capital expenditure is basically synchronized with the copper price. After the copper mine capacity, the copper mine capital expenditure is about three years. Since 2017, the copper mine capital has begun to shrink, which will also cause the new copper mine capacity to continue to slow down after 2017. However, the strike of large-scale copper mines in the world last year led to a decline in the growth rate of copper production last year. However, the interference rate has decreased significantly since the operation in the first half of this year. Labor negotiations have led to fewer strikes, and copper mines can operate normally. Therefore, the copper mine output in the first half of the year made up for the decline last year. However, the current variable in the second half of the year is that Escondido, the world's largest copper mine, has a round of labor negotiations because of its large capacity and great impact on market supply. At present, the negotiations are in progress, but the progress is not smooth, and it is expected to take a long time, which is also an important factor for many such information in the market that disturbs the copper price in the second half of the year

although copper mines have entered the stage of cyclical contraction, the growth rate of major copper mines in the annual plan this year remains relatively high. This is mainly to make up for the decline in growth last year. Therefore, the tightening situation of copper mine is still expected, and in reality, the output of copper mine is still high

second, demand

according to the data of relevant institutions, copper consumption still has a large incremental space, but the growth rate has entered the region of slowdown. Specific to various industries, real estate is still relatively resilient, and its investment is also better than expected. However, by subdividing the investment, it is found that the growth rate of other expenses in the completed amount of real estate development investment is higher, and the growth rate of the rest is lower. As for other expenses, they mainly refer to the expenditure of land purchase. Because the state stipulates that 50% of the land purchase money can be paid within the next year, the enthusiasm for land purchase in the first half of the year has led to the continuation of other expenses to the present. Since 2018, the enthusiasm for land acquisition has gradually declined, so the data of real estate investment completion in the second half of the year will be affected, and there may be an unexpected decline. With the de stocking of real estate, the current inventory of houses is flat with that of 2014, which is a very low level. This has a great driving effect on real estate investment. This year, the new construction area and sales area of real estate have shown a steady upward trend

this toughness of real estate has a lagging effect on copper consumption, and will have a good driving effect on the production and sales data of air conditioners in the second half of the year. However, at present, the inventory level of air conditioners is high, at a high level in the same period in history, and the inventory is close to 40million taels again. According to the average consumption in the peak season, it will take nearly five months to digest, and the overall level is still high. Therefore, from the perspective of air conditioning demand, it is not particularly optimistic

the State Grid is relatively optimistic. As of May, the cumulative year-on-year rate was -21.20%, significantly lower than that of the same period last year. According to the national electricity investment plan, electricity investment is expected to increase by 7.12% this year, and it is expected that electricity investment will accelerate in the second half of the year, which will boost copper consumption. However, it should be noted that there is an interval between the purchase of electricity and the automatic zeroing of this unit. That is to say, the pull of copper by the purchase order of electricity in the second half of the year may need to be delayed until 2019 to see the effect

III. trade frictions

compared with the previous quarter, the deterioration of trade frictions is the biggest incremental risk. In August, there is still a need to negotiate tariffs on nearly 200billion goods. From the competitive and cooperative relationship between China and the United States, which was previously bound by core interests, to the intensifying conflict now, trump is challenging the entire existing trading system. It not only targets China with a fixed asset investment of no less than 2billion yuan, but also directly affects Europe, Japan, Canada, and even indirectly affects many emerging market economies that rely on external demand, such as bicycle frames, fishing rods, and rowing. It can be seen that the exchange rates of emerging market economies also collapsed in the first half of the year, especially in countries such as Argentina. As far as the current situation is concerned, there is no short-term simple solution to the problem. The asking price of the United States (such as reducing industrial subsidies) is related to the fundamental choice of China's economic development mode. Therefore, trade friction should be a more lasting and far-reaching policy

trade frictions also increase the global risk. The rapid depreciation of the yen today can reflect that the impact of trade friction on the yen is higher than market expectations, and more directly show the impact of trade friction on global foreign trade volume. In addition, the year-on-year total export volume of South Korea is known as a more accurate leading indicator of the economic cycle in the market. Its indicator is currently negative, which has a great impact on Global trade