Guide: At the beginning of this year, after the fading of Trump's infrastructure story, copper prices once withdrew, but began to rise all the way after hitting the year's low in May.

On Thursday, non-ferrous stock futures rose, with the main contract of Shanghai Zinc futures leading the domestic commodity futures market by 1.63%, and the non-ferrous metal sector ranked second among 29 industries by 1.71%.

Analysts said that China's better-than-expected economic data, the phased weakening of the U.S. dollar index and the resurgence of supply side of some varieties have led to the recent rise of domestic non-ferrous stocks. However, in view of the differences in the fundamentals of different varieties, future market trends are expected to differentiate. Nevertheless, continue to be bullish on the relevant non-ferrous stock targets.

Stock period goes up again hand in hand

Yesterday, non-ferrous metal futures overall strong, including Shanghai Zinc futures main contract with a 1.63% increase, leading the domestic commodity futures market, Shanghai lead, Shanghai tin, Shanghai nickel main contract closed up 0.71%, 0.64%, 0.33%, Shanghai copper, Shanghai Aluminum main contract due to near the end of the dive, finally closed down 0.5%, 0.34%.

In the A-share secondary market, the performance of the non-ferrous sector is more eye-catching. Wind data showed that as of yesterday's close, the non-ferrous metal sector in CITIC's first-class industry finally closed at 5759.27 points, up 1.71%, ranking second among 29 industries.

If the time dimension is lengthened, since June this year, the non-ferrous futures index in Wenhua Finance and Economics has increased by 11.55%, while in the A-share market, the non-ferrous metal sector in CITIC's first-class industry has increased by more than 20%.

"Since May this year, the prices of non-ferrous metals have risen one after another, especially since June, even the worst nickel price in the earlier period has risen, prompting funds to begin to pay attention to the non-ferrous metal plate. In addition, China's economic data continue to be better than expected, and the market is increasingly optimistic about the macro-level, and the non-ferrous price has always been one of the cyclical indicators, which is also the main reason for capital to enter the non-ferrous plate. CITIC Anxin Futures Chief Metal Analyst Che Hongyun said.

In addition to the improvement of market expectations for China's macro-economy, Cao Yang, a non-ferrous analyst at the East Securities Derivatives Research Institute, said that the phased weakening of the US dollar index and the constraints of capacity-free policies and environmental supervision on the supply of some varieties were also the main reasons for the sharp rise in the price of non-ferrous shares in the current round.

According to statistics from China Securities News, the cumulative decline of the dollar index has exceeded 9% since this year, and it has been hovering near a 14-month low recently. CITIC futures non-ferrous metals researchers said that at present, the weak U.S. dollar index pattern has not changed, non-ferrous metals benefited from the weakening of the U.S. dollar in recent days once again rallied.

From the perspective of capital flow in futures market, Wenhua financial and economic data show that the non-ferrous sector dived in the afternoon yesterday, totaling 13.61 million yuan.

Cao Yang said that the recent influx of speculative funds into the field of non-ferrous futures, especially bullish sentiment continued to heat up, contributing to the rise in futures prices. However, after the market enters the expected test period at the micro level, we need to be alert to the trampling market caused by the concentrated profit of long speculative funds leaving the market. At the same time, rising prices will also bring more hedging, and the multi-empty game will intensify.

"Disturbance" on the supply side

Copper, as the "leader" of non-ferrous metals, has always attracted the attention of the market.

At the beginning of this year, copper prices withdrew after Trump's infrastructure story faded, but began to rise all the way after hitting the year's low in May.

On the supply side, BHP Billiton, Australia's mining giant, reported in April that it would cut its copper production forecast for the whole year of 2017 by 17% to 133-136 million tons. BHP Billiton explained at the time that it lowered its copper production forecast after Hurricane Debbie hit several Australian mines and a 44-day historic strike at Escondida Copper Mine in northern Chile, the world's largest copper mine with a 57.5% stake recently. This copper mine accounts for about 5% of the world's total output.

In addition, since the beginning of the year, global copper strikes have been "one after another", and copper supply has been affected repeatedly. From the earlier strike at Escondida mine in Chile and the subsequent shutdown of Grasberg, the world's largest copper mine, the strike boosted global copper prices and provided initial speculation for this round of increases.

In addition to supply-side support, China's strong demand has also increased the growth point of Dr. Tong's price rise. As the second largest economy in the world, China's GDP grew by 6.9% in the second quarter, indicating that the economy continued to stabilize. At the same time, data on industrial output and fixed investment also showed robust performance, with June data exceeding expectations. In terms of industrial demand, China's summer high temperature weather has also generated strong demand for copper tubes for air conditioning.

Citigroup pointed out in its July report that the future trend of copper prices is closely related to China's economic development prospects. In the second half of 2017, due to the upgrading of power grid and vehicle sales, China's demand for copper will increase moderately by 3%-4%. The supply gap will push copper prices up to more than $6,000/ton, and may reach a peak of $7,000/ton by the end of 2017.

In addition, aluminium, which benefits most from the expected impact of supply-side reform, has also become a "star" variety in non-ferrous metals. It has been intensively recommended by many domestic securities research institutes, and its industrial chain has also received extensive attention.

Gu Fengda, senior analyst of Guoxin Futures Non-ferrous Metals, said that since this year, the focus of non-ferrous metals prices has shifted on the whole. Among them, aluminium prices have shown strong resilience, mainly due to the strong anticipation of adding codes to national environmental protection and capacity removal policies.

According to Gu Fengda, according to the time requirement of document 656 of "Cleaning up and Rectifying Illegal and Violatory Projects in Electrolytic Aluminum Industry" to develop and transform industry (2017), we are now entering the third stage, that is, the node period of special spot checks. The second half of the year may be more substantive than the first half, but the specific impact needs to be assessed.

As the largest aluminium industry base in the world, Shandong Province is stepping up the policy of promoting supply-side reform. Leading enterprises, Weiqiao Aluminum Industry and Xinfa Aluminum Industry, have begun to respond to the national policy of cleaning up the illegal construction of electrolytic aluminium and shut down their illegal production capacity one after another. It is understood that Xinfa has shut down its illegal electrolytic aluminium production capacity of about 530,000 tons. Weiqiao plans to reduce its production capacity by 1.4 million tons, including a total of more than 600,000 tons of 316KA electrolytic cells. The future process of further reduction remains to be seen.

Differentiation of Colored Materials

In the future, how long will colored be "red"?

"From a macro perspective, global economic growth expectations, especially changes in China's economic growth expectations, and the trend of the dollar index will be the key factors leading the future trend of non-ferrous metals." Cao Yang said.

From the basic point of view of the varieties themselves, Che Hongyun said that in the future, there will be some bottlenecks in the supply of non-ferrous metals, and there will be less divergence in the market, which is also the main reason to support the price trend of non-ferrous commodities. However, the key factor that will dominate the price trend of non-ferrous metals in the future will return to consumption, that is, whether the overall economy can get rid of the current recovery stage and enter the rising stage.

Looking forward to the future market, Che Hongyun believes that from the perspective of cyclical factors, the lowest price of non-ferrous metals has emerged, and prices will continue to rise in the medium and long term. But in the short term, because of the rapid rise of non-ferrous prices, downstream consumption has been restrained, and the possibility of price falling will increase, especially in the case of the impact of real estate on the economy and China is still in the situation of de-leveraging.

Cao Yang said that in the short term, macroeconomic factors will continue to exist. Aluminum needs to observe the promotion and landing of capacity policy on the supply side. Lead and zinc need to observe the restraint of supply by environmental protection supervision. The domestic policy environment in the third quarter supports the non-ferrous price to a certain extent. As long as demand does not show a significant weakening, the non-ferrous price may maintain strong volatility. Of course, we need to observe the micro-level mapping and sustainability of macroeconomic improvement in the medium and long term. If downstream demand weakens, and price rebound stimulates supply expansion, prices will face greater pressure to reverse. Operationally, short-term investors can maintain more ideas, while medium and long-term investors are advised to wait and see or wait for short opportunities on the right side.

Specific varieties, CITIC futures non-ferrous metals researchers said that copper, short-term capital game is still the main. For aluminium, although the fundamentals are weak at present, the policy advantage is still dominant and the short-term impact is strong. As for zinc, the low inventory level of zinc ingots at home and abroad still supports the price of zinc. However, with the gradual digestion of domestic macro-positive expectations and the weakening of Dr. Tong's driving role, it is expected that there will be a high adjustment in the short term. As for lead, due to the environmental impact of the "three-nothing" recycled lead enterprises, the situation of reducing and stopping production is more obvious, which leads to the tight supply of domestic recycled lead. In addition, in recent days, lead prices have risen in warehouses, with good multi-capital cooperation, and both domestic and foreign lead prices have broken through short-term pressure levels. It is expected that the short-term volatility will continue. As for nickel, the price of nickel has rebounded considerably from the bottom, and the pressure on the top is not small. In the second half of the year, the tin market as a whole was in a tight state of global supply, but domestic demand side liquidity was not good, resulting in the domestic tin market oversupply. Overall, tin prices will tend to fall.