With the poor performance of the US economic indicators in early August, the growth rate of GDP in the second quarter of the Eurozone fell far more than expected. The market is worried about the second recession of the European and American economies, and it is hard to avoid the sell-off of non-ferrous metals. The greater impact on the demand for non-ferrous metals is that China's high-speed rail investment and construction have suffered a “cold winterâ€, and the expectations of high-speed rail to drive demand for non-ferrous metals have failed.
At present, the only confidence that non-ferrous metals are stable is the investment demand brought by global currency over-selling. In the weakening of effective demand, investment demand has become the only hope for metals.
On August 10, the State Council executive meeting decided to reorganize the system's safety assessment for railway construction projects that have been approved but not yet started. Suspension of approval of new railway construction projects, and in-depth demonstration of the accepted projects, and reasonable determination of the technical standards and construction plans of the project. Because the construction of high-speed rail requires the construction of power grids, the construction of galvanized iron towers, and the trains of high-speed rails need to apply high-strength aluminum alloys, and the power supply also involves lead-acid batteries, while the construction of high-speed rails suspends new projects and reduces the speed, then the government Purchasing of power cables, galvanized iron towers, and high-strength aluminum alloys will fall sharply, making the consumption of non-ferrous metals that were originally in the off-season "worried."
In the first half of the year, the demand for non-ferrous metals has the following major components: transportation represented by high-speed rail and intercity railway, housing construction, household appliances represented by refrigerator air conditioners, and electric power represented by power grid transformation and upgrading. Among them, electricity, real estate and high-speed rail have the most demand for metals. By estimating the high-speed rail to account for about 12% of the total demand for non-ferrous metals, the non-ferrous metal replenishment activity in the second half of the year is weaker than expected.
From the perspective of the output of processed products of non-ferrous metals, downstream demand has gradually turned weak. China's copper production in July was 959,000 tons, a decrease of 95,000 tons from the previous month, a decrease of 9.0%. Domestic aluminum production in July also fell by 5.8% from the previous month to 2.304 million tons. On the other hand, reflecting the consumption of aluminum, the import of scrap aluminum has also declined. The galvanizing market also showed off-season characteristics. The galvanized output in June was 1,135,100 tons, down 7% from the previous month. At present, the lead-acid battery is only 10%, although the market for lead-acid batteries is warned, it will take time for more companies to resume production.
At the same time that consumption is weakening, the supply of some varieties will heat up, which will trigger some varieties to make up. In July, China Southern Power Grid was in a hurry, the Guangxi lead-zinc mine was shut down, and the operating rate of domestic key zinc smelting enterprises fell to a new low of 74.09%, and zinc production could be further reduced. At present, the processing cost of zinc ore continues to decline. The mainstream transaction rate of zinc concentrate processing is concentrated around 5,000 yuan/ton. The price of processing fees for foreign miners has dropped significantly to below US$90/ton. The production of lead ore and refined lead dropped significantly. The lead content of lead ore dressing in July increased by 13.49% year-on-year, while the chain fell by 19% to 214,000 tons. In July, refined lead production fell by 4.7% year-on-year to 353,800 tons.
Recently, the economic indicators in Europe and the United States were lower than expected, and the market worried about the second recession in the US and Europe. Rating agency Moody's also chose to lower US economic growth expectations at this time, and cut the US economic growth rate to 2% in the second half of the year.
The risk of European debt has not dissipated, and the new round of crisis is gradually approaching. First, Germany and other core countries were dragged down by the hard-hit countries such as Greece. The economy slowed down sharply in the second quarter. It has been reluctant to continue to bear high rescue costs, and the European Financial Stability Fund has set a ceiling of 444 billion euros. With the spread of the crisis, the fund will be exhausted. Secondly, the crisis spread to the core countries. Italy may have financing difficulties in September. It needs to raise 61.7 billion euros. Once the crisis in Italy, Spain will have a chain reaction. France and Germany have large risks in Italy, then the whole The euro zone will not be spared.
In short, after the economic recovery into trouble, China’s suspension of high-speed rail projects has caused the demand for non-ferrous metals to “snow worse†in the second half of the year, and European debts are facing a greater crisis in September, so the downside risk of non-ferrous metals is gradually increasing, only waiting for Europe and the United States. With the introduction of a looser policy, investment demand will only turn around.
At present, the only confidence that non-ferrous metals are stable is the investment demand brought by global currency over-selling. In the weakening of effective demand, investment demand has become the only hope for metals.
On August 10, the State Council executive meeting decided to reorganize the system's safety assessment for railway construction projects that have been approved but not yet started. Suspension of approval of new railway construction projects, and in-depth demonstration of the accepted projects, and reasonable determination of the technical standards and construction plans of the project. Because the construction of high-speed rail requires the construction of power grids, the construction of galvanized iron towers, and the trains of high-speed rails need to apply high-strength aluminum alloys, and the power supply also involves lead-acid batteries, while the construction of high-speed rails suspends new projects and reduces the speed, then the government Purchasing of power cables, galvanized iron towers, and high-strength aluminum alloys will fall sharply, making the consumption of non-ferrous metals that were originally in the off-season "worried."
In the first half of the year, the demand for non-ferrous metals has the following major components: transportation represented by high-speed rail and intercity railway, housing construction, household appliances represented by refrigerator air conditioners, and electric power represented by power grid transformation and upgrading. Among them, electricity, real estate and high-speed rail have the most demand for metals. By estimating the high-speed rail to account for about 12% of the total demand for non-ferrous metals, the non-ferrous metal replenishment activity in the second half of the year is weaker than expected.
From the perspective of the output of processed products of non-ferrous metals, downstream demand has gradually turned weak. China's copper production in July was 959,000 tons, a decrease of 95,000 tons from the previous month, a decrease of 9.0%. Domestic aluminum production in July also fell by 5.8% from the previous month to 2.304 million tons. On the other hand, reflecting the consumption of aluminum, the import of scrap aluminum has also declined. The galvanizing market also showed off-season characteristics. The galvanized output in June was 1,135,100 tons, down 7% from the previous month. At present, the lead-acid battery is only 10%, although the market for lead-acid batteries is warned, it will take time for more companies to resume production.
At the same time that consumption is weakening, the supply of some varieties will heat up, which will trigger some varieties to make up. In July, China Southern Power Grid was in a hurry, the Guangxi lead-zinc mine was shut down, and the operating rate of domestic key zinc smelting enterprises fell to a new low of 74.09%, and zinc production could be further reduced. At present, the processing cost of zinc ore continues to decline. The mainstream transaction rate of zinc concentrate processing is concentrated around 5,000 yuan/ton. The price of processing fees for foreign miners has dropped significantly to below US$90/ton. The production of lead ore and refined lead dropped significantly. The lead content of lead ore dressing in July increased by 13.49% year-on-year, while the chain fell by 19% to 214,000 tons. In July, refined lead production fell by 4.7% year-on-year to 353,800 tons.
Recently, the economic indicators in Europe and the United States were lower than expected, and the market worried about the second recession in the US and Europe. Rating agency Moody's also chose to lower US economic growth expectations at this time, and cut the US economic growth rate to 2% in the second half of the year.
The risk of European debt has not dissipated, and the new round of crisis is gradually approaching. First, Germany and other core countries were dragged down by the hard-hit countries such as Greece. The economy slowed down sharply in the second quarter. It has been reluctant to continue to bear high rescue costs, and the European Financial Stability Fund has set a ceiling of 444 billion euros. With the spread of the crisis, the fund will be exhausted. Secondly, the crisis spread to the core countries. Italy may have financing difficulties in September. It needs to raise 61.7 billion euros. Once the crisis in Italy, Spain will have a chain reaction. France and Germany have large risks in Italy, then the whole The euro zone will not be spared.
In short, after the economic recovery into trouble, China’s suspension of high-speed rail projects has caused the demand for non-ferrous metals to “snow worse†in the second half of the year, and European debts are facing a greater crisis in September, so the downside risk of non-ferrous metals is gradually increasing, only waiting for Europe and the United States. With the introduction of a looser policy, investment demand will only turn around.
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