Summary of SMM Bronze Morning meeting on October 29th
[10. 29 SMM Bronze Morning meeting minutes] Macro aspect: 1) the US President said that the United States is moving faster than planned in signing some Sino-US economic and trade agreements, and the resulting optimism has boosted US stocks to a record high, while safe haven assets such as US Treasuries and the yen have fallen. (2) British Prime Minister Johnson accepted the EU decision to postpone Brexit until January 31, eliminating the risk of a no-deal Brexit on Thursday, and the pound strengthened. 3) both imports and exports of goods fell to their lowest level in more than a year in September, the latest sign that President Donald Trump's tariffs are hitting the US economy, and the merchandise trade deficit narrowed unexpectedly in September as imports fell more sharply. Fundamentals: 1) Copper concentrate: the Quellaveco copper project in Peru was protested again when local farmers called for the construction of the Quellaveco copper mine to solve the problem of water pollution and decided to resume the strike on 5 November. According to Anglo American Resources Group's estimates, the mine will produce 300000 tons of copper a year after reaching production and is scheduled to be put into production in 2022. 2) scrap copper: the price difference of fine scrap yesterday was 934 yuan / ton. New progress has been made in Sino-US trade relations. This week, the Federal Reserve discussed interest rates, and the market generally tended to cut interest rates by 25 basis points. In addition, the fourth Plenary session of China's 19th CPC Central Committee is also expected to be favorable to the release of good signals, which is expected to boost copper prices. The market is optimistic about scrap copper prices in the short term. At the same time, most downstream waste enterprises expect scrap copper import approvals to shrink significantly in the fourth quarter, and scrap copper supply is expected to support copper prices. 3) Import of copper: there was a loss of about 450 yuan / ton on imports yesterday. Import losses are difficult to narrow, market shipping sentiment is growing, and quotations are still falling. The price of a good copper bill of lading has been reduced to just over $80, and there has been a lower price drop in the recent arrival bill of lading. Market demand is difficult to find, a small amount of demand to greatly reduce prices, buyers and sellers of the price difference is large, the market transaction is difficult, the foreign trade market continues to be light. 4) inventory: LME copper stocks were reduced by 5375 tons to 255650 tons on October 28, while copper warehouse receipt stocks in the previous period increased by 960 tons to 62158 tons. 5) spot: spot, the recent discount source is favored by the market, so there was basically no discount yesterday afternoon, enter the end of the month, most of the holders also do not have a greater financial pressure, the willingness to sell the goods is not strong, so the market trading gradually turned to a stalemate, is expected to rise today, more inhibit downstream buying. It is estimated that the spot is flat today-20 yuan / ton. Copper prices and forecasts: copper prices remained high last night, mainly due to the deepening expectations of better trade, the European Union agreed to postpone Brexit, the market risk aversion eased, the three major stock indexes in the United States pulled up, and gold prices returned to below the 1500 mark yesterday, keeping copper prices at recent highs. At present, macroscopically, China and the United States are close to finalizing the first phase of trade agreement to ease friction, the risk of Britain leaving the European Union in a disorderly manner has been basically lifted, and the tide of interest rate cuts by global central banks has continued to rise, and macro gains have a strong boost to copper prices in the short term. At present, Shanghai copper is above all moving averages, the red column of MACD index is enlarged, and the technical side shows that the trend of copper price is also relatively strong. Copper prices are expected to remain high today. It is estimated that today's copper 5890-5950 US dollars / ton, Shanghai copper 47200-47600 yuan / ton.