SMM News: since the Spring Festival, the domestic copper price trend is weaker than the external market, domestic and foreign prices show inverted trend, in March domestic and foreign negative price gap continued to widen, once reached more than 1000 yuan. Because domestic smelters use foreign prices when purchasing imported raw materials, and domestic prices are used for the sale of electric copper products at home, this means that for every ton of raw materials imported, they will face a loss of more than 1,000 yuan. The processing income of the smelter has been eroded.
In the face of the unfavorable market situation, under the unified deployment of the group company, the company quickly made a judgment: by increasing the export of electrolytic copper, on the one hand, avoiding the loss of negative price difference, on the other hand, by increasing the supply of foreign markets, the company reduced domestic sales. Strive to reverse the market situation of high on the outside and low on the inside. As soon as the decision was made, the Ministry of Commerce of the company immediately began the work of market inquiry and negotiation, reached a spot agreement on the export of 6000 tons of electric copper in just one week, and increased the availability of goods with the cooperation of production, quality, transportation, and other departments. And temporary deployment of containers and barges, as soon as possible to arrange product delivery. In March, the company achieved more than 6000 tons of electric copper exports. For a time, Tongling Foreign Trade Terminal and container barges in the Yangtze River Basin were full of export electrolytic copper with Jinlong Copper Industry LOGO.
At the same time, the major domestic smelters have also responded one after another, increasing the spot export volume, a large number of electrolytic copper has been delivered to the foreign market in the short term. With the increase in copper exports and the landing of the Chinese government's massive tax cuts, the negative price gap between the two cities quickly fell and turned into a positive price gap in early April, turning raw material imports from smelters from losses to gains. Jinlong Company has also successfully achieved the expected goal and achieved remarkable results: by increasing exports, first, it has avoided the huge loss of negative price difference; Second, making use of the advantages of the company's product brands (TG-JL and JINTUN) through the London Metal Exchange (LME) registration, exported to Southeast Asia, Europe and other places to improve the Jinlong brand awareness and expand the brand influence; The third is to solve the difficulties of poor domestic consumption and difficult domestic sales, digest the company's inventory in a timely manner, and avoid overstocking of funds; Fourth, following the pace of the group company and cooperating with other domestic smelters to promote the market to return to normal quickly, thus ensuring that the processing income of domestic copper smelters will not be lost. In the context of the trade war between China and the United States, it shows the strength of China's copper industry.
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