China ’s imports of unwrought copper and copper materials in November increased by 29% year-on-year and 18% month-on-month. In the current global macroeconomic downturn, China's copper imports have increased significantly. This can not help but ponder whether it is stimulated by import profits, is it a normal seasonal factor, or is there another hidden reason behind it? Is the "financing copper" phenomenon resurging? In this regard, industry insiders have mixed opinions.
Multiple factors lead to a significant increase in copper imports in November
A few days ago, the General Administration of Customs released data showing that China ’s unwrought copper and copper imports in November were 452,022 tons, an increase of 17.9% from the previous month ’s 383,507 tons, and a year-on-year increase of 29%; November ’s scrap copper imports were 430,000 tons, higher than last month. 380,000 tons. The sharp increase in import data indicates that China has a strong willingness to absorb goods, which is mainly due to the opening of the import window.
In fact, since May this year, China ’s imports of refined copper and unwrought copper have increased significantly. Investigating the reasons, Everbright Futures analyst Xu Yongqi believes that it mainly includes the following points: First, imports began to stimulate import profits for about three consecutive months starting from June; second, the RMB exchange rate appreciation accelerated in the second half of the year; The expansion of smelting capacity has increased the demand for unwrought copper. Fourth, domestic production has fallen in the past three months, and imported refined copper has made up for the shortage.
In addition, it is worth mentioning that the approaching of the Spring Festival also promotes imports. During the Spring Festival, the working hours are short and transportation is difficult. Usually, traders will import batches within 2 months before the festival, which will also contribute to the large increase in copper imports in November.
Is it related to "financing copper"?
With the increase in China's copper imports, some market participants have expressed their views. Is there another hidden reason behind the surge in imports? Is the phenomenon of "financing copper" resurging? In this regard, the industry's views are different.
"The domestic 'financing copper' business has always existed in China, and the increase in copper imports this time should be related to financing," Zhu Shiwei, an analyst at Wu Yongan Futures, told reporters.
He analyzed that the current global economic environment is not good, and physical consumption is not so strong. Copper either flows into financing or becomes a commercial inventory backlog. And from the downstream point of view, the operating rate seasonally decreases, the inventory of finished products rises, the spot premiums weaken, and the downstream purchases goods on demand, and the consumption situation is not optimistic. Therefore, the surge in imports this time is more a trade operation and is likely to be a popular financing business rather than an increase in physical consumption.
However, some analysts believe that the increase in imports has little to do with “financing copper”. Shanghai medium-term analyst Fang Junfeng said that the phenomenon of "financing copper" has always existed, but the large increase in imports in November is not necessarily related to the increase in imports in the case of profitable imports.
Xu Yongqi also believes that "'financing copper' has always existed, but the increase in imports this time has little to do with 'financing copper', which is a normal seasonal factor of imports." Copper will continue to fluctuate years ago.
Combining the current subtle macro situation, experts generally believe that copper prices in the market will continue to fluctuate.
At present, the copper market has been dragged down by the global manufacturing decline and slowing demand, and the supply gap has narrowed. The macro environment still has uncertainties. For example, the European debt problem has not been solved to the satisfaction of the market, and China's monetary policy may be fine-tuned. Although the demand for Chinese copper is positive, due to the interweaving of macro negative factors, the positive impact of Chinese demand has been diluted.
Xu Yongqi believes that before the end of the year, the international copper market will be affected by liquidation risks such as fund settlement and fund redemption. Market transactions will be light and copper prices will maintain a narrow trend. Fang Junfeng also said that at present, the global copper price still maintains a volatile market, and the trend may be slightly stronger, but the possibility of a large market as a whole is unlikely.
However, some people in the industry are optimistic about the future copper market. Entering the new year, the new fund will reconfigure the proportion of commodities. Affected by favorable factors such as capital redistribution and domestic terminal consumer stocking, the copper market may usher in a wave of rising prices.