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[SMM Analysis] the interference at the end of the Mine helps Shanghai Copper Jump High Open Station to reach 40, 000 gateways
Apr 7,2020 10:34CST
translation
Source:SMM
The content below was translated by Tencent automatically for reference.

SMM4 7: this morning, Shanghai bronze main contract 2005 jump high open, standing on the 40, 000 gate. SMM believes that it is mainly affected by the following factors:

First of all, from a fundamental point of view, the country has opened the way to inventory. Last week, the last period of inventory fell more than 30, 000 tons from the previous month, SMM research shows that the copper production rate has rebounded significantly compared with the previous month. In addition, as of Friday, SMM national mainstream copper market inventory totaled 462100 tons, down 55800 tons from the previous month. Among them, copper stocks in Shanghai fell 42500 tons to 328000 tons, copper stocks in Jiangsu fell 3000 tons to 51300 tons, and copper stocks in Guangdong fell 10300 tons to 82800 tons. At the same time, the spot price of domestic and foreign trade has also risen rapidly, the market buying is active, and the expectation of tax reduction will stimulate the spot demand to a certain extent.

"[SMM analysis] the expected superimposed supply of copper stocks in the mainstream areas of the country will continue to decline.

Second, there have been some disturbances on the supply side. After the Peruvian government extended the state of emergency to April 12, Freeport also said it would extend the overhaul of the Cerro Verde copper mine until April 12. On April 2, Collahuasi said it had reduced its on-site labor force by 40 percent, focusing on workers in mines, concentrators and ports, meaning it would reduce its operating ratio. First Quantum said that the crawling rate of Cobre Panama is expected to slow due to the epidemic, but will strive to maintain the annual production target through an increase in production in the second half of the year. Mexico has declared a state of emergency and suspended all unnecessary activities, and the impact on the supply of copper mines in the country remains to be seen. On Monday, Chilean copper miner Antofagasta said it had suspended the expansion of the Los Pelambres copper mine in Chile for 120 days as a result of the outbreak. Antofagasta also said it had terminated most of the contracts involving the expansion of the Los Pelambres copper mine.

"Antofagasta suspended expansion project at Los Pelambres copper mine in Chile for 120 days

"[concern] Mexico has entered a state of emergency and some mines have suspended operations

The recent increase in global macro stimulus policies

Domestic

The people's Bank of China said on April 3 that it had decided to cut the deposit reserve interest rate by 1 percentage point for small and medium-sized banks in two installments, releasing a total of about 400 billion yuan in long-term funds. The last time the central bank announced a directional cut was on March 13, not far apart. Unlike in the past, the "price" measure was used at the same time-with effect from April 7, financial institutions cut the interest rate on excess reserves at the central bank to 0.35%, encouraging banks to use their money for credit and bond investments at higher interest rates.

From this we can see that with the resumption of the whole industrial chain, the prudent monetary policy began to pay more attention to flexibility and moderation, and put the support for the recovery and development of the real economy in a more prominent position.

Overseas

[Italy introduced the largest economic intervention in history to increase the liquidity of 400 billion euros to enterprises] on the evening of the 6th local time, Italian Prime Minister Conte delivered a televised speech after the cabinet meeting. Italian enterprises will be provided with 400 billion euros of liquidity in the form of state-guaranteed loans, of which 200 billion will be used to help enterprises in the domestic market and 200 billion to strengthen the export market. Together with the 350 billion euros involved in the previous bailout measures, the Italian government injected a total of 750 billion euros into the market, about half of gross domestic product. At the same time, the decree provides for a tax reduction of 10 billion euros in April and May.

Japan will declare a state of emergency in Tokyo and six other prefectures as early as Tuesday to control the spread of the coronavirus. At the same time, the Japanese government is preparing to launch a $990 billion stimulus package to ease the blow to the economy.

House Speaker Pelosi told Democrats she hopes the next stimulus bill for the new crown epidemic will be at least $1 trillion.

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