Big shot interview: next year's metal consumption need not be too pessimistic. New energy and new infrastructure will boost consumption [2021 South China Nonferrous Metals Annual meeting]

"SMM South China Annual meeting | an in-depth Analysis of the Global economy, Copper, Aluminum and Zinc fundamentals and Price trend in 2022

SMM December 10: at the 2021 SMM South China Nonferrous Metals Industry Annual meeting, Lu Jialong, Senior Vice President of SMM, presided over the on-site guest interview. Chen Dixi, Deputy General Manager of Jiangxi Copper (Shenzhen) International Investment Holdings Co., Ltd., Xu Yulong, Deputy General Manager of China Copper International Trade Group Co., Ltd., Liao Huaze, Deputy General Manager of China Shipbuilding heavy Industry material Trading Group Guangzhou Co., Ltd., Chen Xinzhi, Group Vice President of Foshan Nanhai Yucheng Metal Investment Co., Ltd. Hou Yuzhong, deputy general manager of Chinalco Foshan International Trading Co., Ltd., revolves around which terminal links can bring new pull to traditional metal consumption in 2022, the export trend of South China next year, the supply chain pricing proposal of future alloy plate, the most potential metal varieties in 2022 and the average price expectation of copper, zinc and aluminum ingots in Guangdong in 2022.

"Click to watch the full-page video.

Lu Jialong, Senior Vice President of SMM: the start-up and sales performance of the real estate industry is low, export orders are weak, and the overall apparent consumption of basic metals in 2021 shows a trend of high before and low after. Looking forward to 2022, in the context of the weakening of real estate, which terminal links can bring new pull to traditional metal consumption?

Chen Dixi, deputy general manager of Jiangxi Copper (Shenzhen) International Investment Holdings Co., Ltd., said: the impact of real estate on non-ferrous metals has a certain lag, and its impact will be reflected next year, which can also be expected. In addition, future metal consumption can be hedged in infrastructure, and new energy will also provide some supplement to it. Therefore, on the whole, the performance of metal consumption next year may not be very optimistic, but there is no need to be too pessimistic.

As for exports, I personally think that next year's exports may be weaker than this year. Mainly due to the interference of the overseas epidemic this year, the production of enterprises has not yet fully recovered, so most of them are imported from home. Domestic exports are likely to weaken in the second half of the year as overseas outbreaks resume.

Xu Yulong, deputy general manager of China Copper International Trading Group Co., Ltd.: in the first half of next year or the whole year of next year, the completion data of the real estate market may bring a surprise or provide better support for the consumption of non-ferrous metals such as copper. According to the operating rate, the number of real estate market completion may decline significantly by 2023, and the impact on the back-end metal will be apparent at that time. So on the whole, there is no need to be too pessimistic about metal consumption in the real estate market next year.

In the future, the new consumption growth point of non-ferrous metals may come from the recovery of cars and auto parts, at the same time, the new infrastructure will also provide some consumption support.

As for exports, the impact of the epidemic on the global supply chain and transport logistics is uncertain, so no clear conclusion can be drawn on the export side at present. But on the whole, next year's consumption need not be too pessimistic, but there may be surprises in many ways. On the other hand, under the background that the impact of the epidemic on supply chain production is not yet clear and it takes a certain time for global logistics recovery, several metals with relatively tight balance still need to pay special attention to the transaction structure.

Liao Huize, deputy general manager of China Shipbuilding heavy Industry material Trading Group Guangzhou Co., Ltd.: there is no need to be too pessimistic about metal consumption next year. Next year's real estate delivery of basic metal consumption support can still be expected, even if there will not be a new bright spot, at least will maintain a relatively stable state. It is expected that the first half of next year will fall short of this year's consumption expectations, and the consumption situation in the second half of the year is still open to

As for the new consumption growth point, on the one hand, new energy vehicles, new infrastructure. Aluminum may also involve ultra-high voltage and new alloys, but I think these factors will not have a significant impact on overall consumption, but we need to pay attention to supply-side interference.

In addition to the impact of the epidemic on the entire supply chain, the replacement of scrap metal has a relatively large amount of interference on the supply side, so we believe that the substitution effect in this respect next year will be a very big variable; then there is the waste policy, which is a very uncertain factor in the import of foreign waste. However, the current policy has tightened restrictions on scrap, especially scrap. Therefore, many waste manufacturers have a greater demand for alternatives to the use of basic metals. Therefore, on the whole, we need to pay more attention to some interference factors on the supply side next year, and there may be structural arbitrage or opportunities.

Chen Xinzhi, group vice president of Foshan Nanhai Yucheng Metal Investment Co., Ltd.: to supplement what I think is the problem of capital liquidity, no matter in real estate or export, many enterprises have the problem of longer payback cycle and increased financial pressure. this also leads to the dilemma that enterprises clearly have orders to receive, but are unable to take orders because of financial pressure. Therefore, for next year, the liquidity of enterprises is also a big problem. There are too many unstable factors in this regard.

As for new consumption, individuals are more optimistic about some basic metals driven by new energy.

Hou Yuzhong, deputy general manager of Chinalco Foshan International Trading Co., Ltd.: I think real estate is still one of the pillars of the country's economy until a more alternative industry is found. it should still be a relatively large area of consumption in the next year or two.

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