Policy risk release of non-ferrous metal peak season will appear

Under the premise of the continued recovery of the global economy, the consumption of non-ferrous metals is improving. As China's macroeconomic regulation and control policies become clear and European debt problems are gradually being controlled, market investment confidence is picking up. In this context, we have provided conditions for the peak season of non-ferrous metals consumption. We believe that the timing of non-ferrous metal prices is rising again. From the perspective of consumer value preservation and medium- and long-term investment, it is now entering the non-ferrous metal market.
Although it has just entered the New Year just two months, the non-ferrous metal market has staged a roller coaster market. After the new high in the third trading day of the new year, copper, aluminum and zinc fell sharply by 20%, 18% and 30% respectively in one month. However, in the week before the Spring Festival, the non-ferrous metal market launched a rapid pull-up market. At present, the copper price is close to the high point of the beginning of the year, and aluminum and zinc also recovered half of the decline. Considering that the policy objectives of the two macroeconomic regulation and control in 2010 have been clarified, the European debt crisis has gradually subsided, and the consumption of non-ferrous metals is still good. We believe that the non-ferrous metal peak season will soon be staged.
The policy orientation led to a sharp fall in the price of non-ferrous metals at the beginning of the metal market at the beginning of the year, which was directly related to the fear of China's macroeconomic policy tending to contract. China's fiscal and monetary policy easing in 2009 was the main reason for the rise in metal prices. At the beginning of this year, the issuance of bills by the People's Bank of China, the repurchase of stocks and the increase in the deposit reserve ratio triggered concerns about the shift of China's monetary policy, which led to a sharp fall in the price of non-ferrous metals. However, Premier Wen Jiabao of the State Council said at the Third Session of the 11th National People's Congress last week that it is necessary to continue to implement a proactive fiscal policy and a moderately loose monetary policy to maintain the continuity and stability of the policy, which has given the real economy and investors a reassurance. .
The European debt crisis has temporarily eased the European sovereign debt problem since the end of 2009, which triggered a safe-haven demand for capital flows to US dollar assets. Especially in late January this year, concerns about the Greek issue spread to Portugal, Ireland, Spain and other countries. People even worry that the euro zone will fall apart. The euro has thus fallen sharply, and the non-ferrous metals market has also been hit hard. But things have changed since the beginning of February. Among them, the International Monetary Fund said it is ready to help Greece, which is striving to stabilize the public finances. The EU also said it will solve the problem internally. In the Eurozone 27-nation finance ministers meeting held on February 15, the finance ministers urged Greece to take self-rescue measures as soon as possible and submit a report on measures to reduce fiscal deficits to the European Commission before March 16. Greece passed a 4.8 billion euro austerity budget on March 5, which includes plans to cut spending and increase taxes. In addition, the Greek government's subscription of 10-year bonds issued on March 4 almost tripled the issue target (5 billion euros), which somewhat eased investor concerns. Greece will face great challenges in April and May, when more than 20 billion euros of debt will expire. To date, the country has only received financing of 13.6 billion euros. Judging from the current situation, we believe that with the support of other EU member states, the Greek issue will be resolved. Therefore, it is unlikely that the euro will fall sharply in the near future, which will greatly reduce the pressure on the non-ferrous metals market.
The peak season of consumption is coming from the fundamentals, the supply of non-ferrous metals is still a problem. From the copper point of view, the tight supply of raw materials continues. Among them, the supply of scrap copper is the most tense. On the one hand, due to the increase in domestic import tax, the domestic import cost has increased by more than 1,000 yuan. In addition, the shortage of scrap copper in Europe and the United States has made the price of scrap copper close to the price of refined copper. Therefore, the import of scrap copper is basically difficult. The situation from the international market shows that there is also a situation in which refined copper replaces scrap copper.
Due to the domestic smelting and expansion, copper concentrate supply is tight, and the smelting of European and American smelters has been discontinued recently. At present, copper processing fees are less than 10 US dollars / ton and 1 cent / lb. The tight supply of copper raw materials continues to support the copper market.
Due to the recent tight supply of scrap aluminum, the US primary aluminum premium has risen to 6-6.5 cents. Although the exchange stocks remain high, but because of the financing, the supply of primary aluminum in the market is tight.
From the point of view of consumption, from March to May is the traditional consumption season, and the consumption of non-ferrous metals is gradually turning. From the perspective of the real estate industry, the state's regulation of real estate is mainly to combat the depression, real estate will still develop healthily, especially in the second half of last year, the housing supply shortage, and this situation will continue at least until the first half of this year, so from The start of new housing, which has started to rebound sharply at the end of last year, will continue, which will support the consumption of copper, aluminum and zinc. From the perspective of the automobile and home appliance industry, this year, the state will increase the intensity of the automobile industry policy, and the scale of home appliances to the countryside will also increase. From the situation we understand, the non-ferrous metal processing enterprises related to the home appliance industry are now full of orders. In terms of electricity and transportation, although the national grid investment has decreased by 26% this year, the actual impact on the cable is less than half. From the perspective of the transportation industry, as the country's railway construction, especially the construction of high-speed railways, continues to accelerate, this demand for non-ferrous metals is very obvious.  

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