[market voice] 2018 copper prices down more than 13% 2019 dare to bet up? See what the agency says.

SMM, Dec. 27: with Christmas coming to an end, the 2018 story is coming to an end. Looking back at copper prices in 2018, the trend greatly exceeded market expectations, and when SMM made its annual summary at this time last year, the market generally expected copper prices to rise by 10 to 30 per cent in 2018, and the mood was extremely optimistic. As of December 27, 2018, the Shanghai Copper Index was down 13.39% and LME copper was down 17.2% in 2018. Reality and ideal are always at odds with each other.

Since 2018, the scrap copper policy has been tightened as scheduled, the pattern of supply and demand of scrap copper has become apparent, and the frequent shutdown and maintenance of overseas smelters have led to a sharp drop in inventories on the world's three major exchanges. But against the backdrop of escalating global trade frictions and a sustained macroeconomic downturn, copper prices are weak, so what did the market think of copper prices in 2019? SMM thinks the range for copper in 2019 is about the same as this year, with a slight shift in the center of gravity by $100 to $150. SMM collates the views of market institutions for readers' reference.

Everbright Futures Metal Research Director / Xu Mili: financial attributes have become the main factor in the direction of copper price fluctuations. In 2019, financial attributes have an overall negative impact on copper prices. The commodity attribute has a more obvious impact on the fluctuation range and rhythm of copper prices. The relationship between global supply and demand may be further narrowed in 2019. It is estimated that there will be a shortage of nearly 400000 tons of supply and demand for the whole year, which is obviously higher than the level of previous years. On the supply side, the copper supply has entered a low growth cycle, and the copper market supply growth rate may decline; on the demand side, China's macro policy and the low base of 2018 electricity investment in real estate make us more optimistic about the demand growth rate in 2019. Copper prices may fluctuate in a narrow range, with weak shocks. Copper prices are expected to fluctuate in the main range of $5400 to $6, 600 in 2019, with an average full-year price of $6000.

Citic Futures: it is expected that in 2019 copper prices will continue to fluctuate downward, looking for a reasonable price center. The global economy has slowed passively, and the rapid economic growth for three consecutive years since 2016 has come to an end, and the adjustment of economic growth rate will slow down the growth rate of copper demand. new industry growth points in the medium and short term can only wait (new energy vehicles, etc.); However, interference from the supply side (including copper supply under increased interference rates, scrap copper supply under environmental policies, and refined copper output under environmental pressure from smelters in Chile, India, etc.) determines the extent and rhythm of the decline in copper prices. Prices are likely to be high and low during the year, with copper prices running in the range of $5400 to $6600 and 45000 to 53000 yuan per ton in 2019.

Soochow Futures: copper supply and demand is expected to maintain a tight balance in 2018. However, in the long run, with the decline of the original mine taste, the new mine production reduced, and demand still has a more optimistic growth prospects, the contradiction between supply and demand may gradually intensify. At the same time, China's environmental protection policy is stricter, and the import restriction of scrap copper will have a certain impact on the balance of domestic copper supply and demand. China's "Belt and Road Initiative" policy will lead to the growth of global infrastructure investment, the upgrading of the global power grid and the use of new energy will drive the growth of copper demand. Copper prices have been bullish for a long time. Copper prices are expected to fluctuate broadly or high before and after 2019, with the price center moving slightly lower than in 2018.

Xinda Futures: it is expected that in 2019, copper prices will show a "slow bear" trend with a gradual downward shift under the guidance of the macro environment and weaker demand growth, and due to their own fundamentals and low inventory support, the downward process is more tortuous. If you cooperate with the improvement of macro expectations or the support of peak season demand, it is easy to have a phased rebound. Copper prices are expected to decline slightly next year compared with this year, with a March fluctuation range of US $5500 to US $6000 per ton, corresponding to 45000 to 52000 yuan per tonne for the main force of Shanghai Copper.

German futures: the current market has included a variety of pessimistic expectations, but at the same time quietly pregnant with opportunities in the industry. Copper output growth slowed down, downstream demand shift, but the stable performance of demand did not stall with the economic downturn. From the point of view of the final indicator of supply and demand inventory, the current global copper dominant inventory has reached a rare low for many years, while the copper spot rise is at a high level in recent years, indicating that downstream consumption is not weak. In the case that the recovery period of domestic scrap copper has not really arrived, the policy of banning the import of seven categories of scrap copper also implies a supply crisis. We believe that the current weakness of copper prices is due to the panic from the macro side masked some of the bright spots in the copper commodity properties, copper itself has more room for improvement in the margin of supply and demand, and the extremely low inventory of copper provides a good rebound basis for copper prices. After a year of confrontation, dialogue and adjustment, China and the United States are likely to eventually find a new adaptive relationship. Sino-US relations are likely to ease in 2019, and copper prices may usher in emotional repair and value reshaping after the external crisis is lifted. It is estimated that the core fluctuation area of Lun Copper will be US $6500 to US $8000 and Shanghai Copper will be 48000 to 60000 yuan next year.

Risk points: 1 China and the United States continue trade confrontation; 2 China's economic downturn exceeds expectations; 3 electricity investment can exceed expectations; 4 scrap copper import ban aggravates the shortage

Jin Rui Futures: it is expected that the domestic economy will continue the downward trend in the fourth quarter of 2018 in the first half of 2019. in addition, the global economic economy is expected to decline synchronously, and copper terminal consumption of household appliances, cars, construction, and so on will be affected. In addition, the input of domestic smelting capacity increases the possibility of accumulation, so copper prices will continue to explore the bottom. However, in the second half of 2019, the role of domestic countercyclical regulation will gradually appear, and the supply of copper ore is still limited, coupled with the lack of domestic scrap copper dismantling, the import of scrap copper will tighten or expand the gap between supply and demand, and once the macro expectation improves, Copper prices will return to the upward trend, and even if the domestic economy is difficult to stabilize, the profiteering on the supply side will also make it possible for copper prices to deviate from PMI. Therefore, it is expected that copper prices will first suppress and then rise in 2019, with an operating range of 46000 to 53000 yuan per ton of copper in Shanghai. Lun Copper operates in a range of US $5600 to US $6700 per ton.

South China Futures: it is expected that the domestic economy will continue the downward trend in the fourth quarter of 2018 in the first half of 2019. in addition, the global economic economy is expected to decline synchronously, and copper terminal consumption of household appliances, cars, construction, and so on will be affected. In addition, the input of domestic smelting capacity increases the possibility of accumulation, so copper prices will continue to explore the bottom. However, in the second half of 2019, the use of domestic counter-cyclical regulation and control will gradually appear, and the supply of copper ore is still limited, coupled with the lack of domestic scrap copper dismantling, the import of scrap copper will tighten or expand the gap between supply and demand, and once the macro expectation improves, Copper prices will return to the rally, and even if the domestic economy is difficult to stabilize, supply-side gains will make it possible for copper prices to deviate from PMI. Therefore, we expect copper prices to first suppress and then rise in 2019, with Shanghai copper operating range of 46000 to 53000 yuan per ton and Lun copper operating range of US $5600 to 6700 per ton.

Galaxy Futures: statistics to the first half of next year at home and abroad smelter maintenance is still a lot, the impact of more than 400000 tons, the first half of the refined copper supply will be very tight. With the decline of the maintenance tide in the second half of the year, coupled with the centralized production of domestic smelters, the supply pressure will be alleviated, and the supply and demand is expected to be basically balanced during the year. Price judgment: given the increased downside risks to the economy in 2019, we believe copper prices will continue to weaken. But the 90-quartile cost support line, the long-term support line for copper prices, rose to $5836 a tonne, with the bottom of copper rising, and the bottom of copper prices is expected to be around $5700 to $5800 a tonne in 2019. In terms of arbitrage, it is suggested that attention should be paid to the opportunities of intertemporal arbitrage after the Spring Festival. Next year, the situation of weak and strong inside and outside the copper market is more obvious, pay attention to the positive set of opportunities inside and outside the plate.

More points of view update, please keep an eye on!

The SMM 2018 Annual Research report on China Copper Industry chain will be released soon, containing the latest views and data of the SMM Copper Research Group. If you have any requirements, please contact Wu Tingting at 13795448891. you are also welcome to visit the SMM website. Pay attention to the free news and price services provided by the Copper Research Group.

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