12th Rare Earth Summit

May 27-28, 2021
Hangzhou, Zhejiang, China

11th Aluminum Raw Materials Summit

May 20-21, 2021
Hangzhou, Zhejiang, China

9th Magnesium Summit

April 15-16, 2021
Hangzhou, Zhejiang, China

13th World InBiGeGa Forum

March 25-26, 2021
Hangzhou, Zhejiang, China

7th World Antimony Forum

June 13-14, 2019
Changsha, Hunan, China

7th Refractory & Abrasive Materials Summit 2019

May 23-24, 2019
Qingdao, Shandong, China

10th Aluminum Raw Materials Summit

May 16-17, 2019
Zhengzhou, Henan, China

11th Rare Earth Summit

May 9-10, 2019
Qingdao, Shandong, China

8th Magnesium Summit

April 11-12, 2019
Zhuhai, Guangdong, China

12th World InBiGeGa Forum

March 14-15, 2019
Zhuhai, Guangdong, China

6th World Manganese & Selenium Forum

May 21-22, 2018
Hainan Sanya, China
Lv Jie: US dollar still strong, copper price to fluctuate narrowly in Q2
----Interview with Lv Jie, Manager of the Metals Division, Cinda Futures
Cinda Futures Co. Ltd. was established in October established in October, and is a limited liability company specializing in domestic futures. The company has a “license to engage in futures activity” (license No. 32060000) issued by the China Securities Regulatory Commission (CSRC). The company, with registered capital of RMB300 million, is wholly owned by Cinda Securities Co. Ltd, and is one of the larger futures companies in China with standardized management and a strong reputation.

Asian Metal: The U.S. economic data continues to improve, and the US dollar index once exceeded 100. At the same time, crude oil prices have witnessed a slump. Will The Federal Reserve make a start on this?

Lv: Yes, the dollar index is very strong, and it rose from last year's low of 78.91 in May, then exceeded 100 in mid-March this year, and then fluctuated at 95-100. In fact, this is a positive result caused by the interest rate raise. However, Federal Reserve officials’ vague statements and the economic data, which fell short of expectations in some months, could all weigh on the US dollar. Right now, the non-agricultural data, such as unemployment rates and non-farm payroll employment, have reached the Federal Reserve’s expected goal, so we need to focus on inflation in the United States. And we believe the Federal Reserve will not raise the interest rate until after September. Because the U.S. economy is U.S. economy is U.S. economy is U.S. economy is U.S. economy is the Fed has tightened its monetary policy with the dollar remaining strong.

Asian Metal: The appreciation of the dollar will place the European Union and other emerging economies in a dilemma. Recently many countries, including those in Europe, have implemented loose monetary policies, but the policies will aggravate the devaluation of the euro and the currencies in emerging countries. Do you think the loose monetary policies will have an influence on copper prices?

Lv: From May of last year until early this year, the European Union and other emerging economies were in a dilemma with commodity prices tumbling as a result of dollar appreciation. But at the beginning of this year, the impact of the impact of the impact of diminished as many countries began to implement loose monetary policy. Copper is easy to store, and its financing property will support copper prices. However, it will be difficult for copper prices to rise above RMB45,000/t due to oversupply.

Asian Metal: Will the Chinese government continue to introduce favorable policies to stimulate the economy?

Lv: In order to alleviate the slowdown in China’s economy, the Chinese government has introduced a number of policies to stimulate the economy, such as loose monetary policy, reform of state-owned enterprises, One Belt and One Road, the Asian Infrastructure Investment Bank (AIIB), local debt displacement and real estate tax changes. The Chinese government is likely to introduce more policies to stimulate the economy as long as the economy is still in the doldrums over the next few months, such as loose lending rates for second and letting private companies enter some monopoly industries. And these measures will boost China’s economy to some extent.

Asian Metal: In 2015 copper treatment charges continue to rise, improving copper smelters’ production enthusiasm. At the same time copper inventories have continued to move upward; will this constrain copper prices in the future?

Lv: 2015 is still the peak year for the release of copper production capacity, and it’s highly possible that processing fees remain high, which will certainly stimulate smelters’ appetite for production. However, copper stocks are certain to grow with the continual increase in copper supply and the copper inventory on the LME and SHFE, has witnessed a substantial increase since the end of last year. Therefore, copper prices will come under pressure if market demand doesn’t pick up significantly. But we should also take the macro effects into consideration, especially the loose monetary policy in non-US countries and stimulus polices in China, which will provide positive support for copper prices.

Asian Metal: The period from March to May is traditionally the peak buying season for the domestic copper market, but conditions seem to have been quiet since March in 2015 due to the low operating rate of downstream enterprises, capital pressure and other problems. What do you think are the main reasons for this?

Lv: This is mainly associated with China’s economic growth. The economic slowdown has been inevitable in China with the disappearance of the demographic dividend and institutional bonus, the pressure of emission reductions and environmental protection and other constraining factors. Fortunately, the Chinese government has been aware of the severity of the economic downturn and has taken a series of measures to stimulate the economy. So we will see the operating rate of copper plants gradually being improved over the next few months with a gradual easing of financial pressure.

Asian Metal: This year China's copper production has continued to show a rising trend, but domestic demand remains weak. Will domestic copper exports keep increasing?

Lv: Domestic copper exports mainly depend on the ratio between domestic and foreign copper prices. Large amounts of copper will be imported when the domestic price ratio is higher, while copper exports will see an increase if the domestic price ratio is lower at the time with copper importation suffering losses. Currently the domestic price ratio is around 7.20, which means there is no chance of a reversal in arbitrage, so we won’t see a large quantity of copper exports in the short term.

Asian Metal: What’s your opinion on the copper price trend in Q2?

Lv: The copper price in the Chinese market is most likely to fluctuate between RMB42,000-45,000/t. From a macro point of view, loose monetary policy has been implemented by all countries except the United States, and China is also constantly introducing favorable policies, resulting in a bullish global stock market. Therefore, the possibility of a copper price drop is very low. However, the copper supply will still exceed demand in 2015 and 2016, so copper prices will struggle to rise significantly under the pressure of oversupply. In the second quarter, we should pay attention to the Fed's monetary policy and factors affecting global copper mines.