Copper ** scale up to 100 billion

Near the end of the year, the shortage of corporate liquidity is causing an abnormal increase in the import of copper for financing needs. Despite the increase in import losses, imported copper continues to enter the Bonded Area warehouse. At present, the copper stocks in the bonded zone have reached 1 million tons, which is almost double the inventory in March of this year.

The industry is also expected to accumulate hundreds of billions of yuan in copper over many years. Once the banking supervision is strengthened, the probability of copper exposure will increase greatly.

Although yesterday the Fed launched the fourth round of quantitative easing (QE4), based on the original purchase of 40 billion US dollars per month **** support securities (MBS), based on the purchase of 45 billion US dollars in US Treasury bonds. This unprecedented open-ended project did not become a new catalyst for commodities. On the contrary, due to the favorable policies of the Fed, there was a slight retreat of non-ferrous metals.

At present, the dramatic increase in copper stocks on the London Metal Exchange (LME) has caused LME Copper to suffer a strong setback, domestic and international ratios have fallen further, and import losses have increased. Domestic copper prices have not kept up with the increase in external disk prices, and the pressure on copper prices has continued to increase. Despite the expansion of copper imports, the scale of domestic imports continues to increase.

According to the latest statistics from the General Administration of Customs of China, no 235,300 tons of copper and copper were imported in November, an increase of 13.5% from 329,900 tons last month; in November, imports of scrap copper were 470,000 tons, up from 390,000 of the previous month. Ton. At the same time, the current copper inventory in the bonded area has reached 1 million tons, which is almost double that of the inventory in March this year, and there is no downward trend.

"Now that copper is imported into the bonded area for storage, it is not just a copper company. Many stocks are used as short-term mortgages**. There are some industries that do this, and some do not engage in copper-related production at all. "The internal management of a large domestic copper smelting company stated that it can be said that the copper stocks in the bonded area have used less than 100% and 99% of the total."

Statistics show that in November China produced 531,000 tons of refined copper, a year-on-year increase of 11.6%, a record high. As of December 7th, LME copper stocks increased to a record high of 255,200 tons since August, while copper stocks in the previous period remained at around 200,000 tons.

Obviously, although imports of copper are already a loss, they are still profitable for the trade. Due to the credit crunch last year, the copper ** has been prosperous. Zhou Xiaobo, an analyst at Shenyin Wanguo, predicts that the scale of copper accumulated over many years will be as high as 100 billion yuan, and it will shift from a simple "letter of credit + collateral" model to a high-risk "letter of credit + duplicate mortgage" model. Repeated mortgages provide high-leverage, low-cost funds for the private sector and accumulate credit risks that cannot be hedged.

“Recently, non-performing assets of banks have risen and supervision has increased significantly. This will increase the risk exposure of copper risk. Once strict supervision occurs, it will have a greater impact on copper prices. The situation of liquidity and fundamentals has not been reversed. Under the short-term, the risk of copper prices is greater than the opportunity." Zhou Xiaobo said.

At present, due to weak orders in the terminal industry, copper demand has been limited. Statistics show that in November, the non-ferrous metal rolling industry's Purchasing Managers Index (PMI) was seasonally adjusted to 49.49%, a decline of 1.37 percentage points from the previous quarter. As the entire manufacturing PMI rises, the demand for the non-ferrous metal industry remains sluggish. At the same time, the power industry as a pillar of copper consumption, winter weather is not conducive to the construction of the power industry, air-conditioning output in the winter has risen slightly, refrigerator output is in the off-season, the demand for copper tubes for home appliances has not improved significantly, but in November the copper company The operating rate fell from the previous month and fell to 60.96%.