China integrity International Industry Review
Since 2020, affected by economic recovery in the post epidemic era, excess liquidity and increased demand for energy transformation, copper prices have shown an upward trend as a whole; The performance of various types of copper enterprises in this round of upward cycle has been differentiated. The middle and upper reaches of the copper industry chain have benefited, with good performance in profits and cash flow. The middle and lower reaches are under pressure, mainly in terms of business turnover and credit occupation, but the overall credit Fundamentals of the copper industry remain stable
The outlook of China’s copper industry is stable. China integrity International believes that the overall credit quality of the industry will not change significantly in the next 12-18 months.
Abstract
Since 2021, due to loose liquidity and other factors, the overall international and Chinese copper prices have shown an upward trend. However, changes in energy supply and inflation expectations have slightly disturbed the copper prices, and the overall financial attribute of copper prices has strengthened. At present, the US inflation is high and the expectation of raising interest rates is strong. From the perspective of US dollar pricing, copper prices may be restrained. The rising inflection point still depends on the inhibitory effect of raising interest rates on inflation.
Under the background of gradual easing of the epidemic and loose global liquidity, global refined copper consumption has increased as a whole since 2021. Copper is the upstream industry of the national economy, and the market still maintains a relatively strong demand for copper. In the future, copper still has a large market space in photovoltaic, new energy and other fields. However, the copper consumption base of the above industries is currently low, and its actual copper consumption remains to be observed.
Since 2021, the global supply gap of copper concentrate has narrowed, but the epidemic and shipping still have a certain impact, which is also one of the factors supporting the upward shift of the price focus of the whole year. It is expected that the output of copper concentrate is expected to achieve restorative growth in 2022. At present, the supply and demand sides have basically reached a dynamic balance, and it is expected that there will be no obvious deviation between the supply side and the demand side in the medium term.
Since 2020, the copper price has risen significantly. Under the influence of the upward cycle, the profit distribution decreases step by step along the industrial chain, and the downstream enterprises are facing the pressure of business turnover and certain cash flow. However, as the upstream of the national industry, the downstream demand of the industry is stable, the enterprise operation is relatively stable, and the overall credit level remains stable.
