Nonferrous metals is expected to play the strongest tone in 2019
After a brief rally in July September, nonferrous metals futures have been quiet for nearly two months. Recently, some research institutions pointed out that under the resonance of supply contraction, low inventory and monetary easing, nonferrous metal assets are expected to strengthen again from the fourth quarter to the first half of next year.
The downturn is expected to come to an end. According to statistics of financial and economic data of Wenhua, since 2019, except Shanghai nickel futures showed a significant rise in the center of gravity, other non-ferrous futures have maintained a downturn. Although the whole plate rebounded from July to the first ten days of September, the continuous correction since the last ten days of September has largely reversed the previous gains.
Data shows that since this year, the A-share basic metal index has surged higher and fallen back. As of the end of November 18, the plate rose by 5.67%, significantly beating the market trend of the same period.
As non-ferrous assets weaken, some researchers believe that the "spring" of non-ferrous metals will come. Senior futures and securities investors from Changqing society told China Securities News that under the background of monetary easing, the gold silver copper market has started. From the end of 2019 to the first half of 2020, the copper market is likely to usher in an opportunity of "over matching". The judgment is mainly based on three conditions: the slowing down of its supply growth, the low level of explicit inventory, and the gradual implementation and upgrading of the global counter cyclical policy.
On the supply side, after the last bull market in commodities, copper prices and capital expenditure of copper enterprises peaked in 2011 and 2013 respectively. In terms of inventory, as of the end of October 2019, the copper inventory of the three exchanges totaled 295000 tons, which was at a low level in the past four years. In addition, the copper inventory of domestic bonded areas was 326400 tons, which was also at a low level in history. Overall, the global copper dominant inventory was at a low level in four years. In addition, since the beginning of 2019, 22 central banks have cut interest rates, and the Federal Reserve has cut interest rates three times in a row. Since September this year, the domestic counter cyclical adjustment policy has also increased. It is expected that copper supply and demand will enter a tight balance era in 2019-2020, and copper prices are expected to remain strong.
Wu Xuan, an analyst with Great Wall Securities, said that recently relevant departments proposed to improve the capital system of fixed asset investment projects, reduce the lower capital ratio of some infrastructure projects, and allow equity and equity instruments to raise no more than 50% of capital, which is expected to boost domestic infrastructure investment and promote the recovery of downstream demand for non-ferrous metals.
From the basic point of view, according to Wu Xuan's analysis, copper is a promising variety of industrial metals. Since this year, due to the impact of strike and shutdown and the decline of mine grade, the output of copper concentrate has been limited. From January to August, the global refined copper output fell by 2% year on year. With the continuous strike in Chile, the copper supply end may be further tightened. In terms of demand, copper has a high correlation with infrastructure investment. In the future, with the Macro counter cyclical adjustment policy is gradually deepened, infrastructure investment is expected to promote the downstream demand to turn better, and copper price may gradually pick up.
