Intelligent Finance and Economics App has learned that according to a research report released by Debont Securities, the global monetary environment is expected to change from tight to loose, the domestic economy is gradually stabilizing, and the non-ferrous metal sector is expected to achieve excessive returns. After the bottom of the economy is solidified, prices of industrial metals related to the domestic economy are expected to continue to rise, and the financial and industrial properties of the copper industry may resonate. According to estimates, the global copper mine supply growth in 2024 will be 0.375 million tons, an increase of 1.7%, and the recycled copper supply will increase by 0.04 million tons, an increase of 0.9%. The total copper supply will be 27.34 million tons, an increase of 1.5%; the global refined copper demand in 2024 will be 27.24 million tons, an increase of 2.6%; the copper supply will maintain a tight balance throughout the year.

Regarding the symbol, we recommend Zijin Mining (601899.SH), Luoyang Molybdenum (603993.SH), Tongling Nonferrous Metals (000630.SZ), Zangge Mining (000408.SZ), JCHX Mining Management (603979.SH), and pay attention to Western Mining (601168.SH), Jiangxi Copper (600362.SH), Yunnan Copper (000878.SZ), MMG (01208), China Gold International (02099), and China Minmetals (01258).

Debon Securities' main points are as follows:

In Q2 2024, the price of electrolytic copper hit a new high.

Debont Securities pointed out that since the second quarter, TC has been falling sharply, and coupled with high expectations of interest rate cuts, prices of bulk commodities such as precious metals have risen sharply. The crowding-out risk of copper in New York has also led to a sharp rise in copper prices to a historic high. With the cooling of macro sentiment, and the constraint of high inventory and low consumption fundamentals, copper prices have oscillated back from high levels. In June 2024, the Federal Reserve raised its core PCE inflation forecast for the United States in 2024 to 2.8%. The number of ADP employment in the United States increased by 0.15 million in June, significantly lower than the expected 0.165 million, a slight decrease from the previous value of 0.152 million. This is the third consecutive month that ADP employment has declined, and it is also the lowest level in four months, indicating that the employment market is gradually cooling, providing some support for interest rate cuts and pushing up copper prices. In June 2024, Caixin China's manufacturing PMI recorded 51.8, up 0.1 percentage point from May, and has been above the boom-bust line for eight consecutive months, the highest since June 2021, and domestic growth expectations are also warming up.

In terms of costs, the global cash cost of copper mines continues to rise.

According to Antaike data, the 90th percentile cash cost surged to $5718/ton in 2021, and the bottom space of copper prices continued to rise; on the smelting side, as of early July, the spot price of crude refining fees for Chinese copper smelters had fallen to $2.7/ton, and the China Copper Raw Materials Group Negotiating Team (CSPT) convened a quarterly meeting in Shanghai and officially finalized the guidance processing fee for spot purchases of copper concentrate for the third quarter of 2024 at $30/ton and 3.0 cents/pound. This decision is significantly lower than the guidance processing fee of $80/ton and 8.0 cents/pound for the first quarter of this year. According to SMM's calculations, in June, the spot refining loss of copper concentrate was 2,211 yuan/ton, and the long refining profit was 1,418 yuan/ton.

On the supply and demand side, mining supply has shifted from loose to tight balance, and copper used in the power, new energy, and home appliance sectors has performed well.

Supply side: The import growth rate of copper mines has narrowed, and refined copper exports in May have increased. The TC price of copper concentrate continued to fall from $6.30/dry ton at the end of March to $2.70/dry ton at the beginning of July. CSPT officially finalized the guidance processing fee for spot purchases of copper concentrate for the third quarter of 2024 at $30/ton. In April 2024, according to ICSG statistics, the global production of recycled copper was 0.383 million tons, the production of primary refined copper was 1.909 million tons, and the total production was 2.292 million tons, an increase of 0.5% year-on-year. By the end of May 2024, China's refined copper production had accumulated to 5.537 million tons, an increase of 8.2% year-on-year. In May 2024, China imported 2.2638 million tons of copper ore and concentrate, a year-on-year decrease of 11.3%. From the perspective of import sources, the increase in copper concentrate imports in May mainly came from Peru, Mexico, and other places, while imports from Chile, Spain, and Canada decreased; China's cumulative import of copper ore and concentrate from January to May 2024 was 11.5933 million tons, an increase of 2.7% year-on-year; in May 2024, refined copper exports were 0.074 million tons, an increase of 313.08% year-on-year; from January to May, cumulative exports were 0.144 million tons, a year-on-year decrease of 1.74%.

In May 2024, China imported 2.2638 million tons of copper concentrate and ore, a decrease of 11.3% year-on-year. Looking at the import sources, the increase in copper concentrate imports in May mainly came from Peru, Mexico and other places, while imports from Chile, Spain, Canada decreased. From January to May, China's cumulative imports of copper concentrate and ore were 11.5933 million tons, an increase of 2.7% year-on-year. In May 2024, refined copper exports were 0.074 million tons, up 313.08% year-on-year, and cumulative exports from January to May were 0.144 million tons, down 1.74% year-on-year.

On the demand side, copper performed well in the electrical utilities, new energy fund, and household appliances industries. Investment in power sources and grids has increased year-on-year. From January to May 2024, the completed investment in power generation projects of major electricity enterprises nationwide reached 257.8 billion yuan, a year-on-year increase of 6.5%. The cumulative amount of completed investment in basic construction of grid projects was 170.3 billion yuan, with a cumulative year-on-year increase of 21.6%. On the other hand, the production and sales of new energy autos increased sharply, exerting a significant pull on copper consumption. From January to June 2024, the production and sales of autos were 13.89 million and 14.05 million, respectively, with year-on-year growth of 4.9% and 6.1%, respectively. Among them, the production and sales of new energy autos reached 4.93 million and 4.94 million, respectively, with year-on-year growth of 30.1% and 32.0%, respectively, and the market share further increased to 35.2%.

Risk Warning: Demand in sectors such as photovoltaics and new energy funds may fall short of expectations; economic recovery may fall short of expectations; and copper mining supply may exceed expectations.