Many international factors affect the end of non-ferrous metals revelry?

After the financial crisis, most non-ferrous metals in the world staged a wave of bull markets vigorously. However, due to factors such as the earthquake in Japan, instability in the Middle East and North Africa, and the exit of loose monetary policies in Europe and the United States, non-ferrous metal bull markets have come to an end. However, we believe that although the short-term may face the risk of emerging markets' slowdown in demand for base metals, the impact of demand on prices may not be as strong as in the past two years. However, whether the impact from the supply side of the main producing country may become a part of nonferrous metal prices The main driving force for the rise?

For example, there is room for growth in long-term prices. The past decade has been a bull market for gold. The international gold price denominated in US dollars rose from 265 US dollars per ounce in early 2001 to the recent high of 1,447 US dollars. The demand structure of gold is rather special. Nearly 90% of the demand comes from jewellery and investment. Industrial consumption accounts for only 11%. As most of the gold is accumulated year after year, the old gold recovery regulates the shortage of supply of mined gold. Therefore, the influence of golden age on the value of gold, value-added risk, and risk aversion in times of trouble outweighs the effect of gold supply. You can see several situations in which gold prices have risen in the past decades: First, when the economy is good, gold is promoted as the basic demand for jewelry and anti-inflation protection, such as between 2001 and 2008; second, when the global political economy is unstable, Demand for gold as a hedging tool, such as between 2009 and 2010; third, the devaluation of the gold denominated currency itself, leading to a rise in gold prices in disguise.

And this year and beyond, as the global economy continues to recover, the basic demand for gold is still expected to once again push the price of gold to rise at a high level. These include demand for gold jewelry in India, and gold investment demand in countries such as the United States and China. The UBS Global Commodities Research Group believes that the international average gold price this year is expected to reach the level of $ 1,550, and the gold bull market is expected to continue.

However, in the base metal area, the market has increased its disagreements. The market price of gold-based precious metals is mainly determined by its financial attributes, but the six basic metals such as copper, aluminum, lead, zinc, nickel and tin are closely related to the industrial development in the national economy, and are decided in the market pricing. The role is often their metal properties. From 2006 to 2010, 70% to 82% of the world's basic metal consumption was concentrated in the four major economies of China, the United States, Japan, and Europe. From 2006 to 2009, China's basic metal consumption increase is the main source of global increase. Since the end of 2008, the prices of the six basic metals have all increased sharply. Copper and tin international stocks and prices have surpassed the highs before the financial crisis and set a record high. However, since the beginning of this year, the pace of price increases for base metals has slowed down, and some varieties have been dominated by shocks, reflecting the increase in market disparities and concerns about the underlying metal outlook.

Some of them believe that the basic metal prices have already reflected the follow-up recovery of the global economy in advance, and have even overdrawn future demand growth for some time. Emerging markets including China may be lower than expected this year.

However, the influence of some basic metal supply ends such as copper and tin on the price cannot be ignored. Since the output of the major copper-producing countries will hardly increase in the next year or two, although the demand growth may slow down, the overall trend is still slow growth. It is unlikely that the demand for copper and tin will decline this and next year, and the supply gap may widen. The mitigation of the supply and demand relationship of the global mineral copper can be seen as early as 2013 when Chile's capacity is under construction. Under the influence of the supply side, it is not ruled out that the price of copper and tin may still rise in the medium term, despite the short-term pressure that demand will not reach expectations.

In addition to concerns of slowing demand, another concern of the market for base metals comes from changes in monetary policy: With the economic recovery in Europe and the United States, the United States may take the lead in withdrawing from quantitative easing monetary policy, entering the interest rate cycle, returning funds to the United States, appreciation of the US dollar, and commodity prices. Will fall back.

Small metals mainly look at domestic industrial policies and their application in emerging industries. Since 2009, due to China's rectification of the rare earth industry, the fundamental fundamentals of the industry have fundamentally improved, triggering the market for other small metals. There are two main reasons that have not been seen: First, there is a shortage of global resources, short recovery period, and small metals that China has a comparative advantage and is undergoing resource protection. There may be a return to future value. Second, the application of small metals in emerging industries is expected to be strongly supported by national policies, and domestic demand is expected to achieve explosive growth.