The non-ferrous metal industry will usher in a critical year of opportunities and challenges coexisting

The 2018 Nonferrous Metal Market Report Conference organized by Beijing Antaike Information Co., Ltd. was held in Beijing. This meeting summarized the development of the non-ferrous metal industry in 2017, and relevant experts provided a detailed interpretation and analysis of the current and future situation of various non-ferrous metals.
Chairman Gao Shunqing of Zhongse International Trade Co., Ltd. stated at the meeting that in the past 2017, the production of non-ferrous metals has remained stable, prices have stabilized and improved, corporate benefits have significantly improved, and import and export volume has steadily increased. However, the challenges that exist cannot be ignored. The overall slow transformation of new and old driving forces, low industry profit margins, and difficulties in financing are still prominent. Western countries such as the United States, out of their own interests, are facing increasingly fierce international trade frictions against China's non-ferrous metal products, and the export situation is facing significant challenges.
At present, the Chinese economy is at the end of the structural transformation cycle from 2010 to 2019, and the manufacturing industry has been declining since the third quarter of 2017. There is a high probability that the PMI value in September 2017 (52.4) will be a turning point, and commodities priced in US dollars, represented by non-ferrous metals, are about to enter a turning point one after another. "Wu Xijun, Executive Vice General Manager of Antaike, said in his interpretation. The super rebound in the non-ferrous metal market, which began in early 2016, entered 2018. Unlike 2016 to 2017, where the main driving force for price fluctuations came from the supply side, the core of market pricing logic was demand expectations. The core investment in the non-ferrous metal market from 2018 to 2019 will exhibit a logic of high growth, small market value, and high elasticity
From the perspective of various types of non-ferrous metals:
Copper - The upward trend is not yet complete, and the center of price fluctuations has shifted upwards
Relevant experts indicate that the current round of copper price rise is not yet over. From a supply side perspective, in 2018, the threat of mining strikes remained, especially as several copper mines in Chile and Peru faced labor negotiations. In the first half of 2017, although there were also many threats of strikes and had a significant impact on copper concentrate production, the production of refined copper was not affected due to the high inventory of copper concentrate and crude copper. After the consumption of raw material inventory, if there is another centralized sex strike in 2018, the impact of raw material shortage will be greater than that in 2017. Another important impact is the supply of scrap copper in China. The changes in China's scrap copper policy not only affect market supply, but more importantly, capital speculation will amplify market effects.
In 2018, global copper demand will maintain stable growth. Except for China, the growth rate is expected to accelerate, and domestic demand will be affected by industries such as real estate, and the growth rate will decline compared to 2017. Compared to a bull market driven by demand, the upward instability caused by the fragile performance of the supply side is stronger. In addition, there is also significant uncertainty in macroeconomic, geopolitical, and US dollar and RMB trends. Moreover, the current market expectations for copper prices are too consistent. When market expectations are too consistent, once unexpected events and factors occur, the psychological impact and price fluctuations on the market may be amplified.
In summary, the copper price will not form a unilateral bull market for the time being, but a slow bull pattern. The main trend is the gradual upward shift of the center of shock, while the short-term small unilateral trend relies more on speculation topics brought by funds or other factors. It is expected that the main operating range of copper prices in 2018 will be $6200-8200, with an average price of $6900-7000.
Aluminum - Excess pressure increases in the first half of the year, and is expected to gradually improve in the second half of the year
On the supply side, in 2018, China had a new electrolytic aluminum production capacity of approximately 2.7 million tons/year with investment capacity; In addition, the production capacity of electrolytic aluminum that has been shut down during the heating season and the existing production capacity of electrolytic aluminum that has completed capacity replacement will also gradually enter the production phase, and the supply base for the whole year will still be high. It is expected that China's electrolytic aluminum production will continue to experience negative growth in the first half of the year, with a cumulative production decrease of 2.0% year-on-year. The annual production is expected to be 38 million tons, with a significant decrease in growth rate compared to 2017.
Due to the impact of the overall environment, domestic demand for primary aluminum is unlikely to show a strong growth trend last year, especially in the traditional aluminum consumption areas such as construction and electronic power. The investment growth rate has shown a continuous decline since the second half of 2017, which has suppressed the growth of domestic demand in 2018. From the first half of the year, although the current market's expectations for domestic primary aluminum consumption are generally positive, the sustainability of domestic demand growth momentum still needs to be observed. At the same time, the continuous warming of China US aluminum trade friction has also led to a deteriorating international trade environment for China's aluminum exports, and exports are facing significant pressure. It is expected that the annual consumption of primary aluminum in China will be 37.6 million tons, with a growth rate of 6.0%, a decrease of 2 percentage points compared to the previous year, and the overall market surplus.