China Nonferrous Metals Industry Association: Analysis of copper industry operation situation in December
In December 2023, the operation of China's copper industry showed the following four characteristics:
(1) The production and operation of copper smelting enterprises are basically stable
The rapid growth of cathode copper output of domestic copper smelting and production enterprises in 2023 is mainly due to the combined effect of multiple factors: the effective release and improvement of new smelting capacity and resumption of production capacity; the copper concentrate processing fee remains high in the first half of the year The level has stimulated the production enthusiasm of smelters; smelters have increased their utilization of scrap copper raw materials. In December, although the production situation of major domestic smelting enterprises was not as expected, the output was still stable and high throughout the year. The total output of cathode copper in that month achieved double growth month-on-month and year-on-year.
In 2023, the copper concentrate processing fee TC will first rise and then fall, and the decline will accelerate at the end of the year. In December, spot supply at the mine was tight and demand was strong, and the pressure on processing fees worsened rapidly. Copper concentrate inventories at major ports decreased that month, resulting in a tighter spot supply and demand situation at ports. The processing fee TC for imported copper concentrate continued to fall back, and the decline accelerated, falling from US$79/ton to US$62/ton within a month, and then to about US$65/ton at the end of the month. In addition, at the end of December, the China Copper Raw Materials Joint Negotiation Group has finalized the spot copper concentrate processing fee TC for the first quarter of 2024 at 80 US dollars/ton and 80 cents/pound, which is 95% higher than the spot copper concentrate processing fee TC in the fourth quarter of last year. US dollars/ton and 9.5 cents/pound decreased by US$15/ton and 1.5 cents/pound, showing the market's expectations for tighter supply of copper concentrate.
(2) Downstream production is differentiated and the end market is picking up
From the perspective of downstream sub-sectors, in December 2023, overall, the demand in the domestic downstream copper industry was relatively stable, and the operating rates of classified industries were somewhat differentiated. The operating rate of refined copper rod-making companies dropped slightly, and the operating rate of wire and cable companies also showed a seasonal weakening trend, with a slight decline from the previous month; the operating rate of copper foil fell sharply, and overseas orders did not see a significant improvement at the end of the year; in addition, the production of copper tube companies increased Trend, thanks to the recovery of overseas demand, export production schedules are higher than domestic sales, the operating rate has increased month-on-month, and the copper plate and strip operating rate continues to be optimistic. In order to ensure the demand of the terminal market, companies have increased production capacity and increased stocking to complete orders.
From the perspective of the terminal market, the production and sales situation of the terminal industry in December was relatively optimistic. my country's power supply project completion investment progress has accelerated, power grid projects have maintained steady growth, cable company orders and copper consumption have shown good growth year-on-year, especially orders related to the new energy field have grown rapidly; air-conditioning company production schedules have increased year-on-year, affected by foreign market demand , exports continue to pick up. In addition, both the real estate and automobile markets have experienced tailwinds. Among them, real estate transaction data has rebounded month-on-month and turned to growth year-on-year; automobile sales have also generally improved, performing better than the same period last year. New energy vehicle production and sales and exports achieved substantial year-on-year growth.
(3) Copper prices first rose and then fell
In December 2023, LME March copper opened at US$8,477/ton, with a maximum of US$8,716/ton on December 28, a low of US$8,238/ton on December 6, and closing at US$8,562/ton, which was lower than US$8,716/ton on December 6. Last month it rose by US$92.5/ton, or 1.1%. The average LME copper prices for the current month and three-month futures were US$8,394/ton and US$8,484/ton respectively, up 2.9% and 1% year-on-year, respectively, and 2.6% and 2.6% month-on-month.
The trend of Shanghai copper in the internal market is basically the same as that in the external market. In December, the average price of SHFE copper for the month and three months was 68,766 yuan/ton and 68,363 yuan/ton, respectively, up 4.1% and 3.6% year-on-year, and 1.2% and 1.3% month-on-month.
The average price of LME three-month copper futures in 2023 has declined compared with last year. The average LME copper prices for that month and three-month futures were US$8,447.5/ton and US$8,515.5/ton respectively, down 3.5% and 3.3% respectively year-on-year. The internal SHFE increased slightly compared with last year. The average prices of copper for the current month and three-month period were 67991.1 yuan/ton and 67759.7 yuan/ton, respectively, up 1.4% and 1.9% year-on-year.
(4) Refined copper imports decreased slightly
In December, my country's refined copper imports decreased year-on-month, with imports of 339,000 tons, a year-on-year decrease of 6.9%, and a month-on-month decrease of 15.3%; copper concentrate imports were 2.484 million tons, a year-on-year increase of 18.1%, and a month-on-month increase of 1.6%. .
In December, domestic refined copper production increased significantly, the price difference between refined and scrap expanded, the role of scrap copper in replacing refined copper gradually increased, and the shortage of refined copper resources in the market was alleviated. Although the import profit narrowed that month, the import window remained Open.
In December, the import volume of recycled copper was 193,000 tons, a year-on-year increase of 38.8% and a month-on-month increase of 5.5%. The import volume of scrap copper increased both year-on-year and year-on-year in December, mainly because as the price of refined copper increased, the price difference between refined copper and scrap widened, and the role of scrap copper in replacing refined copper increased. In addition, the domestic refined copper resource pool
The inventory is low and the supply is tight, so some waste recycling companies import scrap copper to maintain production.
Overall, in terms of my country's copper product imports in 2023, the import volume of copper concentrate and scrap copper has increased to varying degrees year-on-year, while the import volume of refined copper has decreased year-on-year. The annual copper concentrate import volume was 27.536 million tons, a year-on-year increase of 9%; the scrap copper import volume was 1.986 million tons, a year-on-year increase of 12.1%. The annual refined copper import volume was 3.737 million tons, a year-on-year decrease of 3.8%.
It is initially expected that China's copper industry prosperity index will still be operating within the "normal" range at the beginning of 2024.
