The US market has been well supplied, with increasing cathode imports from Chile and Peru, which totaled 107,171 metric tons in March, up 182% month over month and 54% year over year. ![]() Cathode exports by smelters in China have continued to arrive at LME warehouses in Asia, where stocks have nearly doubled over the past month. This is reflected in cathode stock increases at COMEX and the LME. Downstream restocking enthusiasm picked up following a sharp price fall in late April.ĭue partly to a weaker-than-expected seasonal demand improvement, global copper cathode supply has been sufficient. It is important to note that demand in China remained higher than during the equivalent period of 2022, however, thanks to strong growth in wind and solar power capacity, and robust output of air-conditioner units and EVs. While the real estate sector remained sluggish, recent weakness also came from infrastructure investment, as indicated by wire and cable producers receiving fewer orders from the projects compared with the March quarter. Both short-term loans and medium- and long-term loans fell in April, reflecting lackluster consumer confidence and willingness to buy houses. Both National Bureau of Statistics (NBS) and Caixin PMIs dropped below 50 in April, with the total new order index falling to 48.8 from 53.6, according to NBS, and the corresponding export index dropping to 47.6 from 50.4. In China, pent-up demand from the post-COVID-19 recovery contributed to expanding manufacturing activity in the March quarter, but momentum has faltered into the June quarter. We expect that weak copper demand from the real estate sector could almost offset the positive performance from the US power and EV sectors, which has prompted us to downgrade 2023 US copper consumption annual growth to 0.6% from 1.8%. A lack of confidence in the real estate sector has continued to depress investment and construction activity, with the US Census Bureau reporting new privately owned housing unit starts down 18.9% year over year during the first three months of 2023. Higher mortgage rates cooled US property sales, which dropped 2.4% in March from February and were down 22.0% from a year ago, according to the US National Association of Realtors. In the US, the Institute for Supply Management manufacturing PMI increased to 47.1 in April from 46.3 in March - the lowest reading since May 2020 - but it was the sixth consecutive month in which the PMI remained in contractionary territory. The European IHS Markit manufacturing purchasing managers' index (PMI) weakened from 47.3 to 45.8 in April. In China, the slowest consumer price index rise since the start of 2021 has added to concerns over the strength of the country's economic recovery, pushing the LME 3M copper price down to a multimonth low of $8,275/t on May 12. The copper price tumbled to $8,488/t on April 27, weighed down by financial sector turbulence and expectations of the US Federal Reserve further increasing interest rates 25 basis points in May. The LME 3M copper price has been falling from $9,086/t on April 14 on both weaker-than-expected China demand in the peak season for construction activity and subdued consumption in the US and Europe as interest hikes weigh on economic growth. Our LME 3M copper price forecast for full year 2023 has been downgraded to $8,785/t from $8,830/t. ➤ We have downgraded our LME 3M average copper price forecast for the June quarter to $8,614/t following the recent price correction, although we have upgraded our September-quarter forecast to $8,743/t. Meanwhile, we expect a weaker US dollar - affected by the US economic slowdown and the likely pause in US interest rate hikes - to support copper prices in the second half. ➤ Global copper demand is likely to trend higher over the next few months. Although cathode stocks continue to fall at the Shanghai Futures Exchange (SHFE), copper cathode supply remains sufficient for downstream consumers. ![]() ➤ Sufficient global supply of copper cathode has elevated stocks at COMEX and the LME. There continues to be strong growth in wind and solar power capacity, however, and robust output of air-conditioner units and electric vehicles. ![]() ![]() ➤ In China, the real estate sector continues to labor, and demand weakness also came from slowing infrastructure investments in April.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |