August domestic supply and demand of large metals and imports and exports

In August, domestic refined copper production exceeded 500,000 tons, reaching 518,000 tons, and the year-on-year growth rate rebounded to 30.48%, an increase of 8.34%. We believe that the reasons for the new record high output include: (1) Maintaining a high level of processing fees and stimulating the production desire of smelting enterprises (2)

After the off-season summer production, downstream processing enterprises resumed production and demand increased. (3)

Scrap copper spreads narrowed and imports fell. Refined copper production reduced the supply of scrap copper.

From the copper consumption index we compiled, the copper consumption in August fell for two consecutive months and fell significantly from the high in the second quarter. Looking at the downstream segment, the output of real estate and automobile industries rose, while the output of air-conditioners, power equipment and the industry declined. The electronics industry was basically the same as last month. We believe that despite the record high output of refined copper in August, the demand of the downstream industry remains sluggish, and the overall prosperity of the industry has not yet been restored.

Aluminum: Due to the lack of electricity, aluminum production in August continued to fall.

In August, domestic electrolytic aluminum production fell for two consecutive months. The monthly output was 1.546 million tons, and the year-on-year growth rate fell to 20.9%, a decrease of 0.13% compared with the previous period. Reasons for the decline in production include: insufficient supply of electricity due to droughts in Guizhou and Guangxi, causing a decline in the operating rate of electrolytic aluminum smelting capacity. In addition, some electrolytic aluminum enterprises in Henan Province have also experienced continuous shutdown of production capacity due to power supply problems, but the scale of output reduction is relatively small, and it is difficult to cause a rebound in electrolytic aluminum prices.

Lead and zinc: In August, the output of lead and zinc decreased year-on-year, and it will take time to recover.

Lead August production was 394,000 tons, down 2.5% year-on-year and 11.3% month-on-month. Affected by this year's environmental inspections on lead, the lead smelter's operating rate has been declining. (In July, the average operating rate of lead smelting companies was 59.24%. This figure showed a slight increase in August).

The August output of zinc was 406,000 tons, a decrease of 6.2% year-on-year and 4.5% month-on-month. Under the influence of power restrictions in some regions, the average operating rate of zinc smelting enterprises in August fell further to 71.41% from 74.09% in July, a record low for the year.

Real estate and auto production fell to low levels in July and August, and demand for lead and zinc was also weak.

When it is difficult to determine when the macro economy is getting warmer, we are cautious about the price of lead and zinc.