In today's global commodity investment boom, commodities have risen, and non-ferrous metals, such as copper and aluminum, have become an important industrial raw material.
Copper, with good electrical conductivity, is mainly used in the construction industry, electronic power, machinery manufacturing, and transportation. At present, the major consumer countries—60% of China is used for wire and cable, and 40% of the United States is used for construction, so China and the United States play a significant role in the use of copper. Copper supply is mainly from the world's largest copper mining and smelting companies, Codelco, PhelpsDodge, and GroupMexico. Their dynamics in the mining areas in Chile, the United States, and Australia are directly related to the supply. Inventory is an important window for understanding supply and demand. At present, the daily consumption of the world is approximately 50,000 tons. If inventory can maintain the consumption level for 2.5 weeks, the market sentiment is relatively stable.
The cost of copper mainly depends on the mode of smelting and energy consumption. Now that South America is on the low side and China and the United States are on the high side, the total global average production cost is roughly 1,600 U.S. dollars, so a copper price that rises above 2,000 U.S. dollars means a huge profit in production. Usually it stops at Near U.S.$3000, U.S. is quickly turned around due to expansion of supply. Just as the price of copper fell below the cost, large-scale production cuts always came into being. As a result, the price of copper continued to rise, and the copper price rebounded and re-emerged. During this period, the global economy, changes in the copper industry, import and export policies, and funds Behaviors, exchange rates, alternatives, etc. will act on copper prices through supply and demand at different stages.
Take the three-month LME price per ton as an example. Take 2003 as the watershed. In the first three decades, copper prices have been fluctuating in the price region of 1300-3200 US dollars, among which 74, 80, 89, and 95 respectively hit the peak, and the copper prices in the past three years are relatively low. It has soared to 8800 U.S. dollars, and it has more than doubled its historical high.
The copper price fully demonstrated its charisma as a leader in non-ferrous metals. All this was attributed to years of depressed prices, unpredictable high economic growth in China, huge copper consumption, and the frenzy of international funds under the long-term depreciation of the U.S. dollar. Push. Looking back at history, in addition to the 95-year Sumitomo Control Panel, all previous bull markets have been accompanied by historic depreciation of the US dollar, the oil crisis, and the consequent hyper-inflationary process. Now we have also encountered cheap dollars and expensive oil, but overall, due to the improvement of the currency structure and credit conditions, the impact of high oil prices on short-term interest rates, economic growth and inflation is less than before. This is today's copper. The fundamental difference between the macroeconomic environment facing the city and the past, and at the same time, there is still room for the actual copper price after removing the inflation factor from the historic high. In short, the price of copper will rise and there will be some declines. The end of the current bull market will depend on the growth of copper supply, the rise or fall of alternatives, the degree of inflation, and changes in mainstream market views. Investors should contact these factors and not just price Put into judgment and action.
Aluminum plays an important role in the construction and packaging industries. Its supply depends on the cost of production, mainly alumina and electricity costs. In China, there is another important factor to consider: government industrial policy.
First of all, the macroeconomics at home and abroad continue to strengthen. Second, as energy prices rise, aluminum's production costs (aluminum oxide and electricity) also continue to increase, and the aluminum smelting industry has been listed as a restricted development industry by the government. The increase in "institutional costs" has eased the momentum of output growth.
On the one hand, there is an increase in demand, and on the other hand, supply is limited. Since the beginning of this year, international aluminum prices have continued to rise, and the historical record has been continuously updated. This has also led to a strengthening of domestic aluminum prices. In general, the general background of global economic growth has not changed. As an important industrial raw material, the trend of rising prices of aluminum is also difficult to completely reverse at a time. With a large amount of money flowing into the commodity market, the medium and long-term inflation risks still exist. It is desirable to maintain a more optimistic outlook on the long-term trend of aluminum prices.
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