Metal spot support is difficult for the enemy's financial properties

The domestic non-ferrous metals market fell across the board this Tuesday, and all varieties showed a downward trend. Although the copper market has fallen for 7 consecutive days, but after breaking the 100 day moving average of 70,650 yuan, the copper market's target seems to have moved down to around 65,000 yuan. Aluminium prices broke 16,700 yuan and the target reached 16,400 yuan. After the price of zinc broke 17800 yuan, the target was placed at 16,500 yuan. Lead price broke 18500 yuan and put the short-term goal at 17,500 yuan. With the original support level and the current resistance level effective, the possibility of a recent downturn in metal prices has greatly increased.

The price of non-ferrous metals ** fell sharply, but the stagnation in the spot market, of which the copper market is the most obvious, the day of Shanghai Yangtze colored spot premium of 350 yuan -400 yuan, the highest level since 2010. At the same time, the domestic and international ratio has also rebounded sharply. At present, it has reached 7.63, close to the normal import ratio of 7.7, and the import loss has dropped to less than 1,000 yuan. In addition to the reasons for the appreciation of ***, the stagnation of domestic copper prices is a key factor.

Since the end of last year, China's imports of scrap copper, refined copper, and copper concentrates have been declining. China’s copper is more than 70% dependent on foreign countries. It can be seen that during this period, China mainly focuses on digesting inventory. From the perspective of the domestic consumer industry, due to the increase in investment in electricity this year, the production orders in the domestic cable and transformer industries related to electricity are sufficient, and the increase in output of air conditioners in the second largest consumer industry is also better than expected. All these indicate that China’s copper consumption is still in progress. Therefore, after the inventory is digested, the fundamentals of the domestic market have started to change. According to our understanding, the supply of scrap copper is tight, and the reasonable price difference with refined copper is 3,000 yuan, which makes enterprises shift their consumption of scrap copper to refined copper and support refined copper prices. In addition to the support of copper's fundamentals, the spot prices of domestic aluminum and zinc have also begun to shrink for three months, indicating the stagnation of the spot market.

However, from a longer period of time, the rise in the non-ferrous metals market since 2009 has more to reflect the financial attributes, that is, excessive currency liquidity supports the rise in prices. From the perspective of the fundamentals and stocks of various metals, it does not seem to support the maintenance of high prices. In addition to the fact that copper is still constrained by the production of mines, the fundamentals of aluminum, lead and zinc in the past two years are all serious excesses, and it is still difficult to achieve fundamental improvement this year. The inventory of all varieties is high, so these goods are very sensitive to the macro and financial markets.

From the perspective of the recent global economic and monetary policies, it does not seem to be optimistic. From the perspective of developing countries, due to inflationary pressures, since the second half of last year, countries’ monetary tightening policies have not ceased, and the contradiction between inflation and economic growth has become increasingly prominent; Europe has to control inflation within the target range this year. The pace of interest rate hikes began in April, but the problem of imbalanced growth in the economy is serious. In particular, the debt problems of the second and third-tier countries have been exposed and caused financial instability. The US, as the global leader, seems to be in the There is also no good performance. With employment and real estate still in the doldrums, the issue of its national debt has further manifested itself. At present, the total national debt of the United States has exceeded 14 trillion U.S. dollars, which is almost equivalent to its gross domestic product (GDP). And in the new year, the U.S. budget deficit will still be as high as 1.4 trillion U.S. dollars, and U.S. debt has had a negative impact on its economic growth. On April 18th, the international rating agency Standard & Poor's downgraded the US’s credit rating outlook to negative, which made it difficult for the United States to use loose monetary policy once again despite its poor economy. This is undoubtedly one of the current economic recovery drivers. Negative effects.

Judging from the situation in major countries in the world, the current macro and financial environment does not seem to be conducive to liquidity-supported non-ferrous metals, which has greatly reduced the support of the non-ferrous metal spot market. Therefore, the focus of the recent market is still on the macro and financial markets, such as the trend of the US dollar exchange rate, European sovereign debt issues, China's monetary policy, only in the case of the above macro factors are flat, non-ferrous metals can reflect the emergence of the support factors of the goods market. .