[SMM Analysis] it is still difficult for the automobile industry to raise the consumption of vibrating copper in the short term.

SMM8, 16th, news:

In the copper demand side transportation accounted for nearly 11%, the automotive industry as an important port of copper consumption, monitoring the production and marketing trend of the automotive industry can well reflect the situation of copper consumption. The latest figures show that the auto industry produced 1.8 million vehicles in July, down 5 per cent from a month earlier and 11.9 per cent from a year earlier. Car sales in July were 1.808 million, down 12.06% from a month earlier and 4.3% from a year earlier. New energy vehicle production in July was 84000, down 37.31% from the previous month, down 6.9% from a year earlier, and selling 80, 000 vehicles in July, down 47.37% from a month earlier and 4.7% from a year earlier. The year-on-year growth rate of new energy vehicles has been very bright since 18 years. In July this year, the production and sales of new energy vehicles showed negative growth for the first time. What are the reasons for that?

The first decline in the growth rate of new energy vehicles in July was mainly due to the impact of the subsidy retreat, and the market overdrawn the consumption power of the subsidy slope ahead of time. So this month's decline does not represent the slowdown of the industry, but accompanied by policy changes in the market choice, but after the subsidy retreat enterprises can still maintain the subsidy stage of high-yield sales, it is worth considering.

The copper consumption of new energy vehicles is much higher than that of traditional vehicles. On the one hand, because new energy vehicles consume copper, including pure electric and hybrid batteries, and national policies encourage support for the development of clean energy, even if subsidies for new energy vehicles gradually decline, the future development trend is still unstoppable. On the other hand, the consumption of copper driven by new energy vehicles also has supporting facilities charging piles. According to SMM, according to the national plan, more than 12000 centralized charging stations and more than 4.8 million decentralized charging stations are expected to be added by 2020, which has great potential for future demand. Therefore, although the production and sales of new energy vehicles declined in July, it can only be regarded as the adjustment of the market in the face of policy changes, the future trend is unstoppable, for the short-term labor pains of subsidy retreat, enterprises are expected to gradually digest. It is expected that the probability of a pullback in production and sales of new energy vehicles in August is high, and new energy is still the potential stock to drive copper demand. However, the overall auto industry production and sales in July is still a large decline, the CAAC estimated that 2019 domestic car sales of about 26.68 million vehicles, down 5 per cent from the same period last year. Of these, passenger car sales are expected to be about 22.44 million, down 5.4%, while new energy vehicles are expected to sell about 1.5 million, an increase of about 19.4%. Although new energy vehicles are expected to form a certain support for copper consumption, but at present, the proportion of new energy vehicles in the automotive industry is relatively small. The cycle of the automobile industry is closely related to the macroeconomic cycle, so in the current situation of the overall macroeconomic decline, the probability of the automobile industry as a whole to boost copper consumption is still small.