3.12 Summary of Bronze Morning meeting
[3.12 minutes of SMM Bronze Morning Association]
Macro aspect:
1) on March 11, the Bank of England unexpectedly cut interest rates by 50 basis points to 0.25 per cent. This is the first time the Bank of England has cut interest rates outside its normal plan since the 2008 financial crisis. On the same day, the chancellor of the exchequer announced the 2020 budget, the total value of fiscal stimulus measures will reach 30 billion pounds. According to incomplete statistics, since March, central banks in at least 12 countries or regions around the world have cut interest rates to hedge the impact of the epidemic on the economy. [Lido]
2) on the evening of March 11, local time, World Health Organization Director-General Tan Desai said in Geneva that the new crown epidemic "has the characteristics of a global pandemic." New cases have been reported in 114 countries and regions around the world, about three times as many as two weeks ago. [bearish]
3) M2 in China increased by 8.8% in February compared with the same period last year, and is expected to be 8.5%, up from 8.4%. A new RMB loan of 905.7 billion yuan was added in February, with an expected 1.196 trillion yuan, up from 3.34 trillion yuan. In February, the scale of social financing increased by 855.4 billion yuan, with the market expected to be 1.875 trillion yuan, compared with the previous value of 5.0674 trillion yuan. [bearish]
Fundamentals:
1) scrap copper: the price difference of fine scrap yesterday was 412 yuan / ton. According to SMM research, bar enterprises generally reflect that scrap copper is difficult to buy, but most of the raw material inventory is still above the safe level, some waste enterprises even have enough scrap copper long single contract, raw material inventory is abundant. Therefore, for the time being, the shortage of scrap copper and high price have an impact on the production of bar enterprises, but it is not serious, enterprises can also flexibly look for alternatives such as copper ingots. [neutral]
2) Import of copper: there was a loss of about 300 yuan / ton on imports yesterday. After Monday's concentrated trading, market demand weakened yesterday, market activity continued to decline from the previous day, the transaction performance is not as good as the previous two days. Because the import price of the far month contract is better than the price, the quotation of the far month bill of lading remains high. Recently, the LME contango structure has narrowed, and the March-April contract is now back structure. The pressure on the holder to change the month increases, which is not conducive to the premium upward. [neutral]
3) inventory: LME copper stocks were reduced by 700 tons to 189725 tons on March 11, while copper warehouse receipt stocks in the previous period increased by 9431 tons to 216513 tons. [neutral]
4) from stock:
East China: yesterday Shanghai electrolytic copper spot to the current month contract report 10-liter 10 yuan / ton. Recently, spot rising and sticking water has a strong willingness to raise prices before delivery, few adjustments, lack of buying attractiveness to the market, most of the market performance is stopped and wait and see, and the willingness to speculate in trade is restrained, while the downstream is waiting for the price to fall back and adjust before choosing the opportunity to enter the market. Therefore, the two markets are now showing the characteristics of a stalemate saw. Spot discount today 10-liter water 10 yuan / ton.
South China: yesterday Guangdong electrolytic copper spot to the current month contract report 30 ~ 10 yuan / ton. Yesterday's significant decline in inventories, coupled with the approaching January most of the holders are reluctant to reduce the price of shipments, especially the price of flat copper is stronger, at one point in the morning quoted-20 yuan / ton, but the transaction is not good down to yesterday's level to lower the willingness to go down again, only some traders are eager to ship goods slightly lower prices. Overall, trading today is mainly concentrated in downstream enterprises to extend orders, trading between traders is relatively quiet.
Copper price and forecast: last night, Lun copper closed at $5508 / ton, down 1.38%, trading volume 18400 hands, position reduced 2890 hands to 307000 hands. Copper prices continued their downward trend last night, approaching the $5500 mark. The fall in copper prices was mainly due to the announcement by the World Health Organization that the new crown epidemic had become a global pandemic, with the market panicked as the number of confirmed cases increased and travel restrictions imposed in more countries. U. S. stocks fell sharply on Wednesday, with the Dow tumbling more than 1400 points, the first to fall into a bear market, as investors began to worry that the 11-year bull market in U. S. stocks was coming to an end. On the crude side, EIA reported an increase of 7.7 million barrels in inventories for the week to March 6, the seventh consecutive week of increase, while oil prices fell again on Wednesday, taking into account the price war. Copper prices are expected to remain low today as a result of risk aversion risks in the market. It is estimated that today's copper 5440-5500 US dollars / ton, Shanghai copper 43300-43800 yuan / ton.
