Copper demand outlook no bright spot processing fee game or key in the fourth quarter

China's supply and demand balance:

The overall demand change is not expected to be large. The bottom line of processing fees in the fourth quarter of China is relatively high, and the release of refined production capacity may not lead to an increase in supply.

Global copper supply and demand balance

Global supply and demand status of refined copper:

In the third quarter of 2017, overall demand maintained a moderate growth year-on-year, while supply resumed from the strike in Chile in the second quarter. It is expected that overall demand changes may not be large in the fourth quarter, while supply is subject to certain uncertainties, mainly due to the release of refined capacity. Does not necessarily lead to an increase in supply. And if the supply is released, or if you want to do more.

Global copper concentrate supply changes towards the future:

Production and expansion plans of the top ten copper concentrate enterprises:

In the third quarter, we adjusted the 2017 production forecast for the world's top ten copper concentrate companies based on company reports and media reports. In September, the production in FY2017 was stable compared to the previous period. However, with the release of unfavorable factors in the second half of the year, the expected production in FY18 has a certain elastic increase.

In September, Chile's National Copper Company (Codelco) said that the company's copper production in the first half of 2017 was lower than the same period last year, but the profit was considerable, due to the sharp rise in copper prices in recent months. The Chilean National Copper Company said that copper production in January-June was 798,000 tons, down from 843,000 tons in the same period last year. During this period, the company's profit before tax was US$1.023 billion, and the loss in the first half of 2016 was US$97 million. Cash costs increased from $1.275 per pound in 2016 to $1.317, as the ore grade of the company's mines declined.

In September, Chappy Hakim, former chief executive of Freeport McMoRan Inc., said that although the company had reached a milestone agreement with the Indonesian government, Freeport still faces the control of the copper mine. huge challenge. Freeport said it will transfer 51% of the Grasberg copper mine and establish a second smelter in Papua, while also committing to invest about $20 billion in the Grasberg mine. Correspondingly, Freeport can “immediately” apply for a three-year extension of the mining license from 2021, and is expected to be extended to 2041, during which the Freeport will have to pay a higher tax burden. But the biggest problem at the moment is how much the shares are valued and who will buy them.

In September, Southern Copper CEO Oscar Gonzalez said the company is considering bidding for the Michiganlay copper development rights as it expects copper prices to rise further in 2019. He also said that the company will begin environmental impact assessment of the LosChancas copper mine in Peru early next year. He said that copper prices are expected to be between 2.60 and 2.90 US dollars per pound in 2018. Since 2019, copper prices may rise further.

According to the overall situation, the supply prospects of the top ten copper concentrate enterprises in the fourth quarter are not much changed. The current capacity flexibility space is not large, and the newly added mines will not be able to form capacity in the short term.

Strike threats in major mines:

An important risk of copper supply in 2017 is the risk of strikes brought about by wage negotiations, after the strike risk has been reflected once.

In August, an executive at BHP Billiton said that its Chilean Escondida copper mine recovered faster than expected after six weeks of strikes, and production is now at normal levels. Escondida is the world's largest copper mine, and the strike of the mine has had an impact on the copper market in February and March. The union representing the striker chose to resume work under the old contract, thus delaying negotiations on the new contract until next year. Danny Malchuk, president of BHP Minerals Americas operations, said that employers and employees may return to the negotiating table early. "There is a special team to solve this problem, we do not rule out this possibility." "If this possibility is realized, I think it will be at the end of this year or the first quarter of next year."

Overall, the Escondida copper mine is currently only BHP Billiton to pay the bonus to quell the risk of a short-term strike again, but the core salary issue is still not achieved, so the risk of strikes still exists.

However, the strike at the Escondida copper mine did not give workers much benefit, which would cause other mine union strikes to be somewhat inhibited.

In May, the Chilean Collahuasi copper miners and the employers issued a joint statement saying that the two sides have reached a new agreement, which is valid until 2020. According to the agreement, 1,485 union workers in the Collahuasi copper mine will not raise wages, but each person will receive a one-time bonus of 11 million pesos (about 16,400 US dollars), and also get 3 million pesos without interest. loan. 70% of union workers voted for the latest agreement. Jorge Gomez, president of the Collahuasi Copper Mine, said in a statement that the agreement focuses on safety, productivity and sustainability, reflecting the willingness of both parties to achieve a win-win situation. The latest agreement will take effect at the end of October when the existing contract expires, valid for three years, or may help reduce the risk of long-term strikes in Chile's large copper mines in the next few years.

In June, Codelco and its El Teniente mine union signed an agreement to guarantee the number of workers with minimal service in case the next round of salary negotiations led to a strike. Under the new labor rules, these agreements are encouraged and considered a good sign before collective bargaining.

In July, two copper mines under Antofagasta Plc faced a strike threat, in which the Zaldivar copper mine entered a strike. However, Antofagasta has reached a new salary agreement with the head of its Centinela copper mine to lift the mine's strike risk.

In August, a representative of the Office of the Ombudsman said on Friday that Peruvian protesters had cleared a roadblock on a road used by Minmetals Resources (MMG Ltd), after the government had declared a state of emergency. Through this road, the company transports the copper concentrate produced by the Las Bambas copper mine to the port. Peruvian President Pedro Pablo Kuczynski announced on Wednesday that the region was in a state of emergency, which suspended the right to assembly and other constitutional rights. Minmetals Resources said, however, that the production of the Las Bambas copper mine has continued during the road blockade.

In general, since the mine is still strict with cost control, it mainly does not increase the fixed salary, but increases the one-time bonus. From the above-mentioned several agreements, basically one-off bonuses are mainly used. The overall supply risk has not been completely eliminated. In addition, there are potential conflicts between Peruvian mines and local communities. However, the Peruvian government is committed to mining development and will not pose too much risk in the short term.

On the whole, the main risk of copper mine strikes brought about by salary negotiations in 2017 has been released, so the supply risk brought by salary negotiations has been small. The supply risk in the fourth quarter is mainly due to the negotiation of processing fees.

Ten major copper concentrate enterprises expansion:

The long-term expansion of the top ten copper concentrate enterprises is mainly based on Rio Tinto and BHP Billiton. Both of these companies are very optimistic about the long-term prospects of copper; the mines are relatively large, but they will basically be put into production after 2020. In the latest situation, both BHP Billiton and Chile's national copper industry have expanded their mineral activities.

In addition, Glencore Africa's mines are mainly based on reducing costs and extending life, by introducing new mines and introducing new equipment. Earlier, Glencore said that the African mine will resume production in 2018. According to the current movement, the resumption of Glencore can still be maintained in 2018. In addition, Glencore can strengthen the acquisition and layout of mines in Africa, that is, the impact on the supply of copper in Africa is increasing, and the concentration of copper supply in the world may be further enhanced, which is more favorable for copper prices, especially in anticipation of lack of increase. The amount of the case.

Overall, from 2017 to 2020, the top ten copper concentrates are currently only in 2018. Glencore can increase copper supply due to the resumption of production in Africa. However, as the total amount is only 200,000 tons, and other miners have no production increase projects, and capital expenditures are limited under the efforts of still reducing costs, the overall outlook for the output of the top ten copper concentrate enterprises is declining.

However, from the situation in recent months, Anglo American and Glencore are also working hard to strengthen the expansion of copper resources, playing a more active role in the new round of copper mine expansion in Peru; plus BHP Billiton, force Tuo, Chile's national copper industry, as a whole, most of the international top ten copper concentrate enterprises are driven by the prospect of copper price, and have acted.

In September, Anglo American's Peruvian head Luis Marchese said that before the company's implementation of the Quellaveco copper project in Peru, the company will start the formal process of selling a majority stake in the project. The company's implementation of the Peruvian copper project is expected to begin in mid-2018.

Other enterprise expansion plans:

In addition to the top ten copper concentrate enterprises, in the first half of 2017, there were not many new copper mine expansion projects, mainly because the previously invested mines began to gradually form capacity.

In April, Zijin Mining (601899, shares) reported that the Kolwezi copper mine project in Congo (King), the project is intensifying construction, is scheduled to start production in 2017, the planned production capacity is 5.8 per year. Ten thousand tons. In addition, there is currently no construction schedule for the Kamoa copper project. In June, the Zijin Mining Congo project has begun to mine.

In addition, Tongling Nonferrous (000630, shares it) Mirador copper mine short-term actual output is only about 100,000 tons, and or a stable supply from 2018.

In July, the leaders of Tongling Group inspected the Mirador copper mine, and others did not track the increase in mines.

In August, Canada informed Tintina Resources that it was approved for the Butte copper project; so far, Tintina has spent $50 million to $60 million to develop mines. In the coming year, it plans to spend another 5 million to 6 million US dollars. Shanahan said the new mine is expected to cost $250 million.

From the situation of tracking in the third quarter, other companies have less expansion plans. The new plans are mainly based on Peru and Chile, and traditional large enterprises have advantages. The total increase of other mines in other mines in 2017 is about 208,000 tons. In 2018, other mining companies are expected to increase by 285,000 tons; in 2019, it is expected to increase production by 245,000 tons.

In general, in 2017, 2018, and 2019, the supply of new copper mines is not much. Therefore, the total supply of refined copper actually depends on the supply of copper concentrates. In addition, due to the low supply growth rate, If global copper demand maintains moderate growth, the tight supply of refined copper will remain.

In addition, in the previous July and August, we tracked the ambitious development plans of Peru and Chile. The total planned capacity is relatively large. However, the future copper project in Peru is mainly in the hands of the government, but has not yet been implemented into specific enterprises. This is The plan announced by the government is huge, but the plan seen from the perspective of corporate statistics is much smaller. We believe that the capacity building in Chile and Peru can only be realized if it is specifically implemented in the enterprise.

Previously stopped production of mines:

In addition to the top ten copper concentrate enterprises, there was no news of a large company's production cuts in the first quarter. Due to the upward price of copper, the current closure of mines needs to consider the possibility of their resumption of production. In 2016, the shutdown production outside the top ten copper concentrates is currently around 240,000 tons.

In May, Polish copper canceled the restart of the second phase project of the Sierra Gorda copper mine in Chile; mainly due to the high investment cost of the Sierra Gorda copper mine in Chile, and the current copper price is not enough to stimulate the continued investment of the Polish copper industry.

However, in August, from the information released by the Chilean government, Polish copper investment in the Sierra Gorda copper mine will continue.

Global mine structure change trends:

Since 2017, mergers and acquisitions between mines have been active;

In March, Anil, president of Vedanta Resources, the largest copper producer in London. Anil Agarwal made a bold move to acquire up to 12% of Anglo American's shares. The London-listed mining company Anglo American has been the main competitor of Vedanta Resources, which he runs.

In addition, Vedanta Resources said it will invest $1 billion in its Konkola copper project in Zambia to create 7,000 jobs. This means that Vedanta Resources, the Konkola copper mine has increased again based on current production, and with the Nchanga copper mine, Vedanta Resources itself has nearly 200,000 tons of minerals in Zambia. If you join forces with Anglo American, a global copper mine group with more than one million tons will be re-emerged globally, which increases the risk of further concentration of global copper resources.

In April, Antofagasta CEO Ivan Arriagada said that in the case of limited investment, mining companies will focus on investing in existing businesses to improve degraded ore quality and boost production. When asked if Antofagasta would consider buying Rio Tinto's stake in the Grasberg mine in Indonesia, Arriagada said, “Like other opportunities, as long as we enter the market, we will consider it.” Hennie, Head of Copper, Anglo American Faul said that it is feared that Antofagasta will still be difficult to convince the board and shareholders to invest heavily.

In May, BHP Billiton said that the company has started plans to sell the Cerro Colorado copper mine in Chile, which is currently in the early stages of evaluation, and the final decision has not yet been made, and it is still unclear whether a sale agreement will be reached. The Cerro Colorado copper mine is located in the Tarapacá region of Chile and produced 77,000 tons of copper in FY2016.

In June, China Polymetallic announced that the company's subsidiary Huaxing Global and Ruilinadi Co., Ltd. entered into the agreement, pursuant to which Huaxing Global has the condition to agree to acquire the mining rights of the Myanmar copper-lead mine for a total consideration of RMB 49 million. According to the announcement, the mining right can cover about 49.59 acres of copper lead in the No. 2 mining area of ​​Hongtukengshan, Banshan Village, Twilight Town, Mandalay Province, Myanmar, from December 24, 2014 to December 23, 2019. The mine conducts mining and development of minerals. The copper and lead reserves of the Myanmar mines are classified into 331, 332 and 333, with an estimated resource of 1,284,500 tons.

In June, a senior official at Volcan, the largest zinc and silver miner in Peru, said the company was looking for mergers and acquisitions in copper projects to diversify the company. The executives are evaluating potential M&A opportunities with a focus on the Chumpe and Carhuacayán copper mines in the north of the country, as well as the Rica Cerrea copper mine.

In August, EMR Capital said it would buy an 80% stake in the Lubambe copper mine in Zambia from ARM (African Rainbow Minerals) and its partner Vale International; the company bought a stake in GoldenGrove copper-zinc mine from MMG in December last year. “EMR will continue to focus on industries such as copper, gold and coking coal through global mergers and acquisitions.”

On September 20th, Anil Agarwal, president of Indian billionaire and diversified minerals company Vedanta, said his family-held trust fund has increased its stake in Anglo American but is not prepared to win the entire Anglo American group. stock. In a statement, Anil Agarwal said that in March, it spent $3.25 billion to increase its holding of 12.43% of Anglo American, which means that the total number of shares held by Anglo American will increase to 20% in the next 10 days. . Obviously, Vedanta's behavior is consistent with the purchase of Zambian mines in March. From its increase in shares of Anglo American, its right to speak in the global copper market has further increased.

In September, Canadian miner First Quantum Minerals said it had increased its stake in Minera Panama to 90% to increase copper output. The increase in the company’s shares caused it to pay a cost of 635 million yuan. Previously, the company held an 80% stake in Minera Panama, which was transferred from Korean miner LS-Nikko Copper.

Judging from the M&A transactions tracked in 2017, it is mainly based on companies other than the top ten mining companies. Through equity mergers and acquisitions, copper resources can be quickly obtained, but because it is only the conversion of existing capacity, therefore, The new capacity is not very helpful.

Global copper concentrate cost curve changes:

The average cost of copper mines in the world's major miners has not changed much. For copper prices, it has been difficult to rely on miners to reduce costs to bring profits, and the decline in copper grades is a common problem over time. The cost change for the overall native refined copper is uplifting.

In addition, from the structure of cost reduction in 2016, the mine decline method is not uniform, but there is no means to reduce investment and increase in by-product income, but these are not sustainable and are easy to rebound.

In addition, according to the report of the Chilean Mining Association, the current cash cost of domestic copper concentrates in Chile is generally higher than other copper producing areas (except Africa and other places); due to the new production capacity of copper concentrates we track, the 2017 increase is almost Very small, so the supply and supply guarantee in production is very important, and Chile's national copper is a benchmark.

From our previous calculations, the national copper industry in Chile is only slightly cautious to survive below US$5,000/ton; if the ground mining is transferred underground, the price of copper required will be more than US$5,500/ton. Therefore, the margin of safety for late copper prices may be between $5,000 and $5,500/ton. However, since the price of copper in the third quarter has entered the range of 6,000-7,000 US dollars / ton, the cost is not significant.

Global copper mine exploration activity tracking:

From the situation tracked in 2017, copper mine exploration activities are also becoming increasingly active.

In August, Sol Gold announced that drilling in the Cascavel copper-gold mine in Ecuador has become one of the most important achievements in the history of copper and gold exploration in the world. According to the 0.1% copper equivalent grade, the 23R hole of the Alpala deposit is 1030 meters deep at 490 meters, the copper grade is 0.59%, and the gold grade is 0.9 g/ton, ie the copper equivalent is 1.16%. According to the 1.5% cut-off grade, the thickness of the ore is 216 meters from the depth of 970 meters, the copper grade is 1.29%, the gold grade is 2.84 g/ton, or the copper equivalent grade is 3.08%. According to the company, the borehole is estimated to be the world's top 20 copper and gold mine drilling results, with a total copper equivalent grade of 1.195%. The amount of resources is expected to be announced for the first time

In July, Phoenix Mining hopes to meet the growing demand for copper by restoring the Empire mine discovered in the 1880s but discontinued in 1942. Phoenix Mining CEO Dennis Thomas said that now is the "perfect time" to develop a new copper mine, and the production of the Empire mine is expected to open in 2020. Phoenix Mining hopes to use the historical data of the Empire mine to determine the reserves of the mine based on 287 mines drilled by the former owner. Thomas said he expects the mine's shallow areas to produce gold, silver and tungsten, most of which remain to be developed.

In June news, Wanbao Minerals and Havilah signed a memorandum of cooperation to promote the completion of the pre-feasibility study for the KalKaroo project. Previously, Wanbao Mining conducted a six-month due diligence on the project. Recently, Havilah also announced the upgrade of KalKaroo resources. The results of the pre-feasibility study will provide a basis for the resolution of whether Marlboro Minerals participates in the financing and development of the KalKaroo project.

In addition, in June news, the First Institute of Geology and Mineral Exploration of the Shandong Bureau of Geology and Mineral Resources recently discovered a large copper deposit in the town of Wapsa, Soluxunbu County, Nepal, with an average grade of 7.9%. The amount of resources has reached a large scale. It is understood that this is the first large copper mine discovered in Nepal, and its high quality is rare in the world.

In May, KGL Resources acquired the land lease rights for a potential copper resource in the Jervois region of central Australia. Wood said that there are good indications that the copper mine is extending north from the Jervois area to the lease of the Unca Creek area.

In April, Canada's Inomin Mining recently announced that the company's first gold-copper-zinc complex exploration project at King's Point has been submitted to the Newfoundland and Labrador Natural Resources Department. The company plans to focus on the newly confirmed deposits in the past two years, focusing on the Rendall-Jackson copper-gold VMS deposit that has been mined in the area. The company expects that in mid-May, after receiving the exploration license, exploration work including the use of polarization/resistivity and high-resolution magnetometers in the priority areas will be gradually implemented.

Carube Copper Corp. (CUC.V) President and CEO Jeff Ackert confirmed that Carube Copper has received a formal transfer document from the Jamaica Ministry of Transport and Mines and will have a special exploration and exploration license previously held by OZ Minerals. Carube Copper currently owns all of the 11 exploration licenses covering 535 square kilometers of Jamaica.

Country data to see the global supply of copper concentrate:

From the perspective of the country,

In September, the Peruvian Ministry of Mines and Energy said that in the first seven months of this year, Peru's copper, zinc and iron production increased, and gold and lead production declined. Copper production in January-July was 1.38 million tons, an increase of 4.3% over the same period last year. The effect of the previous round of capacity production has gradually decreased, and according to the previous Peruvian official estimate, Peru's copper production in 2018 is still flat.

In September, Chilean central bank statistics showed that in August, the export volume of Chile's mineral products hit a new high since December 2014. The export value of mineral products in August was 3.30 billion US dollars, compared with 2.46 billion US dollars in the same period last year. The increase was 34.5%, and the chain increased by 22.4%. In the first eight months, Chile’s exports of mineral products totaled US$21.9 billion, an increase of 13.5% from US$19.3 billion in the same period last year. In August, Chile’s copper exports amounted to US$2.99 ​​billion, an increase of 33.7% from US$2.24 billion in the same period last year, and a year-on-year increase of 22.2%. Among them, the export value of electrolytic copper was 1.421 billion US dollars, and the export volume of concentrate copper was 1.396 billion US dollars.

At the end of July, the Chilean National Copper Council (Cochilco) said that the average global copper price in 2017 is expected to be $2.64 per pound, slightly higher than the previous estimate of $2.60 per pound, mainly due to increased demand in China. The Chilean National Copper Council also expects Chile's copper production in 2017 to be about 5.6 million tons, an increase of 0.8% from the previous year, roughly in line with the previous April valuation. The committee expects Chile's copper production to increase to 5.9 million tons in 2018. Chilean mining minister Aurora Williams said that part of the increase in copper prices in 2017 was due to better performance of China's economic indicators, exceeding market expectations. At present, China is an important export market for Chilean copper. China's economy has improved, especially in the field of copper consumption, such as real estate, which will benefit the Chilean copper market.

In April, the Chilean National Copper Council (Cochilco) estimated that the country's 2017 copper output is expected to be slightly less than 5.6 million tons, previously estimated at 5.79 million tons, adjusted production estimates mainly due to BHP Billiton's Escondida copper mine strike influences. In its quarterly report, the committee said that the Escondida copper mine was shut down for 43 days in the first quarter, forcing it to repair 180,000 tons in January. The latest estimate is 0.8% higher than the 2016 production. Commission Executive Vice-President Sergio Hernandez said in a statement that the year-on-year increase in production was partly attributable to the lower 2016 data, which fell by 3.8% in Chile.

In terms of Africa's supply, Congo and Zambia still have potential to increase. This year and next year, the increase is mainly driven by prices. In 2018, it will increase the number of new years, mainly the resumption of Glencore and the expansion of some mines.

In September, the Zambian Ministry of Mines said that Zambia's copper production this year is expected to decline slightly to 753,992 tons, down from 774,290 tons in 2016, mainly due to the decrease in production of the Konkola copper mine. Paul Chanda, the managing secretary of the Zambian mining ministry, said the Konkola copper mine is expected to reduce production by 40% this year. Lumwana copper production is expected to decrease by 15%.

But then, a report released by the Zambia Chamber of Mines said that it is conservatively estimated that Zambian copper production is expected to increase to 800,000 tons by the end of this year. Between 2000 and 2014, the country attracted $12.4 billion in mining investment, and currently six mining companies in the country are operating. The country will recapture the throne of the largest copper producer in the African region. “This is only a conservative production estimate, and the Zambian government’s production estimate is close to 850,000 tons.”

In addition, the Mirador copper mine in Ecuador actually reached or continued until 2018. Since the current equipment capacity is limited to 100,000 tons, it is estimated that it will not increase in 2017, mainly in 2018.

Therefore, based on the situation in August, from the perspective of country, Chile and Peru and Indonesia's copper supply elasticity in 2017 is not particularly large compared to 2016, of which Chile's supply elasticity or relative increase of 2016 is only 30,000. Tons, while Peru’s latest production forecast, our elasticity increase is about 100,000 tons, Congo and Zambia supply elasticity is 50,000 tons respectively, and Indonesia’s free port is re-exported, Indonesia’s incremental elasticity is maintained at 150,000. Tons, the overall 2017 copper mine has an incremental elasticity of 410,000 tons.

In 2018 and 2019, Chile, Peru, Zambia, Congo, etc., the overall new capacity added is relatively small, and the increase in output elasticity is expected to be relatively small. In addition, the supply elasticity of copper mines in 2018 is mainly based on Chile and Africa, mainly due to the resumption of production of the mines that were previously disturbed or shut down. The recovery flexibility of Chilean mines has been seen in 2017, so the impact on 2018 is somewhat reduce.

Looking at the long-term investment potential from the country:

In terms of investment, the actual investment potential of both Chile and Peru has not been fully explored, mainly interrupted by low copper prices.

From the perspective of Chile, from May 2017, there have been some changes:

Mainly Poland's copper industry canceled the second phase of the Sierra Gorda copper mine in Chile, which is mainly related to the overall higher investment cost of Chile's copper mine. The current copper price still does not support the new investment of Chilean copper mine.

In addition, Chile's biased labor system also makes copper investment a certain risk, and Chile's investment costs are generally high, so the current market conditions are not enough to support a new round of large-scale development of Chile's copper mine.

However, the August situation shows that the rise in copper prices and prospects have already touched Chile’s desire to invest:

In August, the Chilean government said that mining companies are planning to invest about $65 billion in Chile over the next decade, an increase of about a third from previous estimates. Chilean mining minister Aurora Williams said that more than 90% of them are copper projects. Larger projects include the resumption of the El Abra Mill mine and the Sierra Gorda 2030 ktpd mine, the former being a joint venture between the Chilean state-owned copper company Codelco and the Freeport McMullen Copper Company, which is controlled by the Polish miner KGHM. .

If converted according to 90% of the investment, the approximate investment amount is about 58.5 billion US dollars. According to Chile's investment cost of about 200 million US dollars / ton of copper, the potential incremental capacity is about 2.93 million tons, which is further increased than previously expected.

And the Peruvian investment:

In May 2017, Peru’s Minister of Energy and Mines Gonzalo Tamayo announced that three large copper projects will be launched in 2018, namely Quellaveco, Justa and Michiquillay, with a total investment of $7.272 billion. The Minister also stressed that Peru's mining projects currently account for 6% of the world's total, ranking first in Latin America.

In July 2017, following the project announced in May, Peruvian officials said they expected copper production to make a huge breakthrough in the next few years. The data comes from the Center for Competitiveness and Development of San Martin de Porres University in Peru and the Institute of Mining Engineers of Peru. According to the two organizations, 18 copper projects will be put into production by 2021.

This means that as long as the price of copper is right, only Chile and Peru, the potential investment capacity can reach 6.5 million tons.

However, from the tracking situation in September, it is not easy to implement these potential investment capacity.

Lima September 19 news, Peru's Minister of Energy and Mining Cayetana Aljovin said that by 2021 Peru's copper production will exceed 3 million tons. Peru’s copper production last year was 2.35 million tons, and Peru is the second largest copper producer in the world. Aljovin said the government is committed to increasing investment in mining exploration. This means that before 2021, the conversion of copper mines in Peru increased to about 650,000 tons, and these production capacity is roughly equal to the plan announced by the Peruvian government in May, while other project plans have not yet been reliably implemented.

In September, Chilean mining minister Aurora Williams said that Chile's copper production accounted for more than a quarter of global production last year. If the investment project goes well, Chile may increase production by 20% in the next 10 years. In an interview, Williams said that by 2028, copper production could rise from 5.5 million tons last year to 6.6 million metric tons. This year's mine investment has increased by 32% to reach $65 billion, which is a good sign for the Chilean mining industry. The rise in copper prices has spurred the world's largest copper producer to start looking for more minerals. This means that the actual capacity conversion of Chile's mines is also more difficult. In the next decade, Chile's supply expansion plan is only 1.1 million tons.

Therefore, judging from the tracking situation in September, the actual new mines in the future will not be as intense as planned. If the price does not improve excessively, the future supply will grow at a lower rate on average; this will eliminate the supply side of copper prices. Risk, the future copper price is essentially dependent on whether there is any surprise in the demand. As long as the demand is not too bad, the price of copper is generally bullish.

In addition, from the information in September, the release of Chile in the next 10 years is relatively mild, while the increase in Peru before 2021 is relatively mild, and the investment in 2022-2028 is not certain; during this period, globally, copper The increase that demand can see is mainly electric vehicles, infrastructure improvement in developed countries, infrastructure development in developing countries, and transformation of China's distribution network. Therefore, there is a possibility of unexpected surprises in demand. Therefore, in the big direction, copper prices are not available. Turn.

Long-term copper mine & smelting capacity:

In China, the situation tracked in August showed that there was no further new refining capacity plan. The new refining capacity plan in the first quarter was mainly in the Minmetals project in February.

In July, the situation was mainly due to the gradual trial production of some refined copper projects. Therefore, the refining capacity in 2017 mainly depends on the production capacity of the previously planned production capacity. At present, in terms of various situations, the maximum increment of China's refining capacity in 2017 may not exceed 750,000 tons. It is estimated that China's actual refining capacity will be added in 2017. Near 450,000 tons. However, due to the increasingly small elasticity of copper concentrates, if the refining capacity is put into 2017, it will inevitably lead to a further decline in copper concentrate processing fees. Estimated from the situation in July, the elasticity of copper concentrate supply is around 420,000 tons, and the previous copper mine elasticity estimate was maintained in August.

In foreign countries, new smelting capacity was not tracked in the third quarter.

In terms of overall situation, in terms of future new capacity in the world, there are still 450,000 tons of new capacity waiting for launch in the fourth quarter of China, but after the completion of the launch, the smelting capacity will come to an end. The more long-term outlook is that the two projects of Yunnan Copper in Inner Mongolia and Fujian, as well as the projects of Minmetals, will be put into effect in about 2019. So far, China's new smelting capacity will come to an end.

Copper concentrate processing fee:

In July, the China Copper Raw Materials Joint Negotiation Group (CSPT) set a third-quarter processing fee bottom line of $86/ton and 8.6 cents/lb; this is higher than the second-quarter processing fee procurement bottom line, however, due to the second quarter processing fee In fact, it is a high process, so the processing fee bottom line in the second quarter has not been touched.

However, the bottom line of processing fees in the third quarter is relatively high, which is almost the high range of current spot processing fees. Therefore, the bottom line of processing fees in the third quarter actually has a certain inhibitory effect on the procurement of refined copper enterprises.

In August, the overall processing fee maintained a steady decline, and the processing fee in the spot market was already lower than the bottom line set by the negotiating team. Therefore, it has a strong inhibitory effect on the procurement of processing fees for smelting enterprises.

From the perspective of copper concentrate imports in the third quarter, the bottom line of processing fees has a strong limiting effect on procurement.

In September, the China Copper Raw Materials Joint Negotiation Group (CSPT) set a bottom line for processing costs in the fourth quarter of $95/ton and 9.5 cents/lb; in order to win the bargaining for future annual long-term negotiations. Once the processing fee is set, this will have a greater constraint on member companies. Unless the spot processing fee is higher than the bottom line, it will still greatly limit purchases.

因此，四季度主要关注现货加工费对于国内精炼铜供应的影响，我们认为会限制精炼铜产量。

国内冶炼产能增加，冶炼自给能力增加：

综合情况来看，随着2016-2017年精炼产能之后，随后的原生铜冶炼项目开始减少，虽然远期投产计划中依然有南国铜二期20万吨、赤峰云铜二期30万吨、黑龙江紫金10-15万吨签约和中铝东南铜业40万吨签约项目，但是因为无明显时间表，因此集中投放的概率较低，因此原生铜冶炼项目新增幅度是放缓的。这也和全球铜精矿供应的增速趋势较为一致。此外，发改委发布的十三五规划已经意识到精炼产能投放的问题，已经开始政策性约束，上述计划产能或已经是中国精炼铜产能的高峰。

四季度，潜在有45万吨产能投放，如果这些产能集中投放，或使得整体产能利用率下降。

这意味着再生铜计划产能已经高达80万吨，所以，从长期供应的角度来看，铜供应虽然从原生铜的压力下逃脱，但是再生铜供应的压力逐步显现。不过废旧铜供应太过紧张，从十三五规划来看，再生铜占比增量仅增加2%，当前精炼铜供应的主要力量仍然是原生冶炼产能。

精炼铜需求：

从数据来看，2017年1-7月份，全球铜表观需求基本上是以负增长为主，不过，7月份全球铜表观需求同比出现较大增幅；主要是全球贸易活动逐步回升。

除去中国之外，欧洲、美国、日本铜表观需求表现不一，欧洲、美国同比数据比较好，但环比变化不是很明显，日本铜需求整体有一定增长。

从铜需求展望来看，欧洲、美国、日本铜需求点主要是以美国为主。

此前我们已经对川普的扩大基础设施建设对铜需求进行了分析，如下：

2017年美国铜需求是无法受到实际的刺激，而由于目前来看，投资总量仍然在1万美元左右，因此，总需求前瞻依然维持此前我们的折算。

维持对美国基建需求的测算，如下：

对于道路、机场、桥梁，中国的数据或比较有对比性，并且，中国的投资还主要是以轨道交通和铁路为主，对铜的需求要更强一些。因此，美国道路、机场、桥梁大规模建设对铜的需求总量每年的增量可能在15万吨/年以内（如果扣除铝电缆的份额，铜需求就低于10万吨/年了）。

而川普国会演讲并未提电网改造，这或意味着电网改造并非其优先部分，或者是其所占份额较低，这对于美国铜需求预期实际上都不利，不过，我们估算的增量也最大也只是15万吨/年，因此，实质影响并不是特别大。

而电网建设领域，

美国电网迄今已有100多年的建设发展历史，最初是由私营和公营电力公司根据各自的负荷和电源分布组成一个个孤立的电网，随后在互利原则基础上通过双边或多边协议、联合经营等方式相互联网，逐步形成了东部、西部和德克萨斯三大联合电网，这三大联合电网之间仅由少数低容量的直流线路连接，分别占美国售电量的73%、19%和8%。

美国的输电网纵横交错，常见的电压等级有765千伏、500千伏、345千伏、230千伏、161千伏、138千伏、115千伏。据美国能源信息署（EIA）统计，2012年美国200千伏以上高压输电线路有30.7万公里，其中包括约3888公里的765千伏交流输电线路，以及3545公里±500千伏直流输电线路。

美国输电网投资自上世纪70年代以来一直裹足不前，而且长期滞后于电力需求和发电容量的增长。由于输电投资水平低，跨州、跨区电网联系薄弱，输电能力不足，造成了输电瓶颈，使拥有廉价电的州无法送至电力缺乏的州，所以美国亟须建设新的输电线路。美国输电网投资不足的原因包括两方面，一是跨州输电项目建设需要多个州的监管部门同意，有时还要多个联邦政府部门同意，审批程序复杂、审批时间长、获得批准难；二是输电项目投资回报低、建设周期长，与其他领域相比缺乏投资吸引力，影响了输电项目建设资金的筹集。

从一些基础资料来看，美国电网当前最亟待建设的是输电网，特别是跨区域的输电网建设。而输电网建设对铜的需求比较薄弱，铜需求主要集中在配电网领域。

另外，美国配电网有其独特的历史；铝和铜在低压电网领域的应用之争由来已久，据基础资料显示，早在60年代，中美均已经认识到铜资源的稀缺性，均着手研制铝电缆。不过，中国铝电缆初期因技术基础薄弱，加上随后从拉美获得了铜资源，因此铜电缆就成为主导。而美国，80年代末，铝电缆开始成熟，因此北美市场铝电缆和铜电缆各占据50%（目前全世界范围，主要是北美市场铝电缆占比较多，而其他市场还是以铜为主）。

全球铜库存情况：

2017年前三个季度，全球三大交易所库存，LME库存降低2.5万吨，COMEX库存增加10.8万吨，SHFE库存降低4.4万吨，全球库存净增加3.9万吨。

全球铜市场结论：

供应方面：

从9月跟踪情况来看，智利和秘鲁未来产能增加并不是特别多，未来十年智利铜供应增加也仅仅在110万吨左右，而秘鲁2021年之前的供应增量也仅在65万吨左右，智利和秘鲁的供应潜力真正释放实际上也不是容易的事情，这意味着，未来铜供应很难集中到来，供应方面的压力并不是很大。

需求方面：

全球铜需求可能不太有超过预期的情况。从我们对十三五需求估算的情况，2017年中国精炼铜需求增量或在30万吨，而三季度跟踪情况来看，国家电网依然以特高压建设为主，而中国之外的需求目前也没有太大的潜力，整体需求以低速增长为主。

结论：

2017年预期全球供应弹性依然存在，不过，弹性在降低；但是需求情况来看，暂时没有超预期的地方，如果以目前的需求能力，不足以使得弹性消失，所以2017年铜供需整体宽松。

不过，未来几年供应的增量比较低，因此，大方向来看，铜供需出现短缺是高概率事件，建议关注四季度可能出现的低吸机会。整体上，铜价格是一个看长做短的过程。

中国铜市场供需：

中国铜供需平衡现状：

2017年三季度，中国需求同比整体小幅增加，不过，供应的弹性相对更大一些，使得整体三季度整体供需偏向小幅过剩。而四季度，整体需求预估有一定的季节性好转，但是幅度可能不会太大。而四季度精炼铜产能有一定投放，但是供应主要是受到铜精矿加工费的限制，整体供需基本上维持平衡状态。

中国铜供需平衡变动方向：

需求平稳：

华泰期货研究所根据国家统计局数据测算，2017年8月份，中国铜需求整体上同比增速4.56%，环比增速变化不大。从增量来源来看，主要是空调领域同比依然比较强劲，电力电缆领域同比继续低迷，但环比有所好转。

而预计9月份，电力电缆领域环比继续改善，但是或难以和去年同期相比，空调领域同比数据或继续表现较好，但环比已经进入季节性淡季。

整体三季度需求保持温和增长的格局，而四季度展望来看，增速难以出现过于激烈的变化，整体保持温和增加的格局，需求方面较为平稳。

电力电缆行业需求展望跟踪：

国家电力电网行业铜需求：

9月份，我们跟踪国家电网动向，情况如下：

特高压方面：

9月26日，2017全球能源互联网高端论坛在京召开，纪念习近平主席在2015年9月26日联合国发展峰会上，提出的全球能源互联网倡议两周年，加快全球能源互联网创新发展。

全球能源互联网发展合作组织主席、中国电力企业联合会理事长刘振亚出席论坛并作主旨演讲。他表示，在中国政府和国际社会的大力支持下，全球能源互联网发展合作组织联合各方力量，在理念传播、规划研究、国际合作和组织建设等方面做了大量工作，推动全球能源互联网从战略构想进入共同行动的新阶段，开启了全球能源互联网发展新篇章。全球能源互联网发展不断实现新突破、开创新局面，取得了显著成效，赢得了广泛赞誉和各方肯定。

另外，9月初，国家电网指出，国家电网公司“八交七直”建设投运，“二交四直”正在建设，21条特高压工程如巨龙纵横东西南北，输送数千万千瓦的清洁电力，一张以特高压为骨干网架的坚强智能电网已经成形。国家电网回顾了特高压的历史，目前国内属于大规模建设高峰时期，而未来，布局全球，带动产业升级，加快“走出去”。

结合全球能源互联网化的战略，未来特高压电网依然是国家电网的工作的重点。

配电网方面：

9月27日，从国家电网公司三季度新闻发布会上获悉，经过一年半的艰苦奋战，公司克服时间紧、任务重、施工难度大等困难，周密部署、精心组织、严格管理，于9月25日提前三个月完成新一轮农网改造升级“两年攻坚战”。新闻发布会上，公司新闻发言人向媒体和社会发布了公司坚决贯彻党中央、国务院决策部署，切实履行央企“三大责任”、践行“六个力量”，全力推进农网工程建设，切实做好供电服务工作情况。公司累计投资1423.6亿元，完成了经营区内153.5万眼平原地区农田机井通电，实现了平原地区“井井通电”目标；实现了6.6万个小城镇（中心村）电网改造升级全覆盖；完成了7.8万个自然村新通动力电及改造，实现村村通动力电目标，受益人口达1.56亿人。通过这些工程的实施，国家电网公司经营区域内农村地区供电能力和服务水平明显提升，新改造村镇户均配变容量提高到2.64千伏安，供电能力提升65%，农网供电可靠率和综合电压合格率分别达到99.808%、99.677%。

根据国务院部署，国家电网公司新一轮农网改造升级工程规划总投资5222亿元，工程总体5年完成，主要包括“井井通电”工程，小城镇（中心村）电网改造升级，村村通动力电，光伏扶贫项目接网工程，西部及贫困地区农网供电服务均等化，东中部地区城乡电网一体化，西藏、新疆以及四川、甘肃、青海3省藏区农村电网建设等7项工程。其中，前三项工程是国家安排的前两年重点建设任务，2016年启动，原计划2017年年底完成。发布会还发布了公司推进港口岸电及电能替代整体工作情况。近年来，公司在居民采暖、工农业生产制造、交通运输、电力供应与消费、家庭电气化等重点领域，大力推广清洁取暖、煤改电、港口岸电等替代技术，陆续建成一大批典型示范项目。截至8月底，累计推广实施电能替代项目9万余个，完成替代电量近3200亿千瓦时，推动社会用能与生产生活方式发生重要变化，取得了良好社会效益和经济效益。发布会还发布，2018年年底，京杭大运河水上公共服务区将实现绿色岸电全覆盖。

整体上，此前一轮农村电网集中改造已经结束，未来配电网建设集中在西北和西南地区，这也是此前调研中，西北和西南地区电力电缆企业订单情况较好的主要原因。

民用电缆电线领域：

尽管房地产增速放缓，但是在民用电缆电线领域，后期需求展望主要在于消费的省级，如果按照4平方毫米和多线路的平均布线，我们计算的房屋竣工面积后期可以带来的需求也是可以值得期待的。

空调行业需求展望跟踪：

前三季度，空调产量维持较高的同比增速，不过，第三季度，因季节性因素，空调行业环比数据已经下降，但同比依然维持较高增速。

中国铜供应：

中国铜供应现状：1-8月总供应同比有所扩张

2017年1-8月，从直接口径统计的中国铜总供应量为1015万吨附近，小幅高于去年同期的988万吨，其中，精炼铜进口186万吨，大幅度低于去年同期的222.5万吨。精炼铜产量则从去年同期的549万吨增加至584万吨，另外废旧铜进口也从215.8万吨增加至245万吨。另外，8月份，中国总供应大约在125万吨附近，而预估，9月份整体供应预估环比增加有限，环比或持平。

另外，四季度展望上，尽管四季度预估仍然有精炼产能投放，但是加工费采购底线较高，实际精炼铜产量依然受到抑制。因此，国内总供应的扩大或重新需要进口，因此，进口盈亏或保持在较好的位置。

而从间接口径来看，1-8月份铜精矿和废旧铜进口同比均继续增加，精炼铜进口的缩减幅度降低，整体1-8月份总供应同比有所增加。而预计四季度，总供应或保持同比小幅增加的格局。

中国铜总供应展望：增量弹性或在四季度释放完毕

中国精炼铜产量同比继续维持增长，不过，环比变化并不是很大，虽然预估精炼铜产能继续投放，但是受限加工费，精炼铜实际增量预估有限；另外，受到国内质量控制的限制，废旧铜进口或受到抑制，另外，精炼铜进口需要较好的比价，整体供应弹性不是很大。

中国铜供需平衡结论

需求：

华泰铜研究小组根据十三五规划数据计算核实，十三五期间，中国精炼铜需求平均增量或在30万吨/年。

三季度，整体铜需求维持低速增加，从三季度的跟踪的情况来看，国家电网已经完成农村电网改造，未来电网建设主要依赖西南、西北地区电网改造，但是时间相对缓慢，整体需求依然波澜不惊。

供应：

三季度，中国铜总供应两个口径统计同比开会恢复增加，主要是精炼铜进口减少有所缓和；四季度，国内精炼铜产能继续投放，但是铜精矿加工费或低于冶炼企业采购底线，因此，整体供应压力比较有限。

结论：

综合来看，铜需求整体保持低速增长，而国内精炼铜供应继续受到铜精矿加工费的困扰，精炼产能投放未必一定能够带来精炼铜供应的增加，整体供需基本平衡。

作者： 吴相锋

来源：华泰期货研究院

Enter [Sina Finance and Economics Unit] Discussion

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