On Monday, domestic futures opened, most non-ferrous metals rose, Shanghai tin rose by more than 6%, Shanghai copper rose by more than 4%, and then closed at the daily limit. The main contract of international copper futures hit the daily limit, with an increase of 6%. The main contract of polyvinyl chloride (PVC) once hit the daily limit and is now up 6.83%.
Foreign market is also rising, London Metal Exchange (LME) copper rose to $9,000/ton, hitting a new high since 2011. The London Metal Exchange (LME) tin futures rose to its highest level since August 2011 to $27,000 per ton.
Hong Kong stock non-ferrous metals sector is also rising, China Nonferrous Mining rose 14.8%, Zijin Mining rose 9.8%, Wumin Resources rose 11.8%, and Jiangxi Copper Industry rose 6.8%.
After the Spring Festival holiday, affected by multiple macro-positive factors, the commodity market ushered in a strong upward trend. Multiple sectors represented by non-ferrous metals and energy chemicals performed actively, and the prices of multiple varieties hit new highs in recent years.
Market insiders believe that under the combined influence of many factors such as increased market risk preferences, global economic recovery expectations, and rising global inflation expectations, the rise in commodity prices is reasonable.
Among them, copper performance has attracted much attention. Industry insiders said that the poor performance of copper ore supply on the copper side and the growth in demand for copper in the new energy field, coupled with abundant market liquidity, copper has become one of the most eye-catching varieties under the "procyclical" market . "Doctor of Copper" is one of the weather vanes of the macro economy. The continued rise in copper prices also indicates that the market's expectations for global economic recovery have increased and market risk preferences are expected to increase.
Gu Fengda, head of Guosen Futures Research and Consulting Department, told the Shanghai Securities News reporter that the "New Year's Day in Place" initiative in 2021 may advance the resumption of production and work of downstream non-ferrous metals enterprises. Domestic new energy policies and "carbon neutrality" and "carbon turning point" goals are being promoted layer by layer by layer by layer. The "procyclical" varieties led by copper and aluminum have ushered in a spring rebound under the expectations of major domestic industry policies. In terms of supply, the main copper mine production areas, Chile and Peru are affected by the epidemic, and the production and shipment situations are not optimistic.
Recent data released by the U.S. Geological Survey shows that is expected to produce 20 million tons of copper minerals in 2020, a decrease of 2% from 20.4 million tons in 2019. The U.S. Geological Survey said that the main reason for the year-on-year decline in global copper production was the epidemic prevention lockdown measures implemented in April and May last year, which seriously affected the production of Peru, the second largest copper mine producer.
Last Friday, Goldman Sachs raised its 12-month copper target price to US$10,500/ton, a sharp increase of nearly US$1,000/ton from the target price set in early December last year, indicating that there is still room for an increase of about US$1,800/ton. Jeff Currie, head of research at Goldman Sachs Commodity , believes that copper and crude oil are already in the "super cycle" of commodities because demand has "structural upward shifts." He hopes to go long for crude oil and stick to steady because there is still a lot of room for upward trend.
Many institutions believe that commodities have entered a "super cycle" that will last for several years. In this context, how to allocate commodity assets and which commodities have better investment opportunities? Many investment institutions are more optimistic about non-ferrous metals, energy and chemicals and ferrous varieties, while cotton and sugar are held in medium and long term.
Source: Jinshi Data
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