1、 Trend analysis

Copper prices fell first and then rose this week. As of the end of the week, the spot copper price was 51828.33 yuan / ton, up 0.45% from the beginning of the week, 10.46% year-on-year and 5.7% higher than the beginning of the year. Copper prices remain high in the near future.

Copper mine is still tight: with the gradual easing of the epidemic situation in Chile, Chile’s national copper industry has resumed production and projects suspended due to the epidemic situation, and copper output will continue to recover in the later stage. Chile’s copper production is expected to drop 1.2% to 5.718 million tons this year, and 5.824 million tons in 2021. As far as Peru is concerned, after entering September, the problem of road closure in Peru community has been solved, and copper mining in Peru has basically recovered from the impact of the epidemic. At present, it is in the peak stage of labor and capital negotiations in South American mines. Because of the dissatisfaction of miners with the new salary agreement, the risk of strike is rising in some mines. A labor agreement was signed between the Chilean copper Union and the mine, and the strike was avoided. However, the strike risk of Escondida copper mine has not been lifted, and Candelaria mine workers have started to strike on October 8, which has supported the copper price to some extent.

Copper output growth: China’s electrolytic copper production is expected to be 766900 tons in September, with a year-on-year increase of 6.6%, and a month on month increase of 2.2%. From January to September 2020, China’s electrolytic copper production will reach 6.468 million tons, up 0.5% year on year. It is expected that the output of electrolytic copper in October will continue to maintain the growth trend, and the growth rate will be narrowed.

Downstream consumption: in September, the production and sales of automobiles reached 2.524 million and 2.655 million respectively, up 19.1% and 17.4% month on month, and 14.1% and 12.9% year-on-year. From January to September, the production and sales of automobiles were 16.957 million and 17.116 million, down 6.7% and 6.9% year-on-year. Compared with January August, the decrease rates were 2.9% and 2.8% respectively. In September, automobile production and sales achieved a stable growth.

In view of the above situation, China’s industrial production and demand have recovered steadily, the disturbance of Chile’s copper strike has not subsided, and the global inventory is still at a low level. After the end of September, copper prices perform slightly better, and it is expected that the short-term copper prices will maintain a more volatile pattern.