Liquidity determines price inflection point

If the government is forced to shrink liquidity by inflationary pressures in the middle of next year, the global economy may dip two of times, which will also be a turning point in metal prices. In a situation of economic recovery and liquidity, metal prices will continue to rise sharply by May 2010, possibly between 40% and 50%, with copper prices rising at a record high of 8900 US dollars or even a new high of $10000 trillion, and aluminum and zinc may be up to 3000 dollars. But since then, as the government has controlled inflation and contracted liquidity, metal prices may have shifted sharply.　　In operation, in the contraction of liquidity between the active holding of long positions.　　Continued overcapacity due to the price of non-ferrous metals, the end of last year and earlier this year, production capacity for production and production has not only recovered quickly, but also a record high. From the copper point of view, China 9, October Copper production has reached 390,000-400,000 tons, a record high, year-on-year growth in 20%-28%.　　Because of the huge increase in production and imports, China's imports began to fall sharply, falling to 220,000 tonnes in August, down 1/3 from the June highs of 379,000 tonnes, although September due to a rebound in the spot contract, but from October copper and copper imports fell 1/3 again, October Copper imports will continue to fall sharply. Not only that, the ratio of long-term disadvantage has led to long single repurchase, China's bonded warehouse copper is back to lme,11 month 13th LME copper inventory has more than 400,000 tons, compared to the middle of July 257,200 tons of low points increased by 55.6%. Even so, the Shanghai Futures Exchange copper stock is still increasing sharply, the current Shanghai copper inventory has more than 100,000 tons.　　According to Antaike's calculations, China's inventories could exceed 1 million tonnes this year. In addition Comex copper stock also more than 70,000 tons, compared to the beginning of 35,000 tons increased by one times. According to CRU statistics, the world's copper surplus will be 828,000 tonnes in the first three quarters of this year. The International copper Research Group predicts that the annual copper surplus is 368,000 tonnes, and Brook Hunt predicts a 2009 copper surplus of 949,000 tonnes.　　For the 2010 forecast, the International Copper Research group predicts an excess of 539,000 tonnes, with Brook Hunt predicting an excess of 349,000 tonnes. From the point of view of zinc, the domestic smelter operating rate was only 54.15% in January 2009, but it has recovered to near 80% after June. From the output, zinc production at the beginning of this year at about 250,000 tons, the year-on-year decline of more than 10%, but by August, the production of zinc has reached more than 400,000 tons, a record high. Zinc production is expected to reach 4.3 million tonnes in 2009. Antaike predicts that China's surplus of zinc will reach 1 million tonnes by 2009. China's zinc surplus is clear, the Shanghai Futures Exchange Zinc inventory continued to increase, as of November 13, the inventory of the previous period increased significantly to 160,000 tons, compared to the February lows increased by nearly 100,000 tons or 1.6 times times. The production capacity of the Western zinc smelter in the third quarter has been 600,000 tonnes/year. International research on lead and zincOrganization of the latest data, the first eight months of this year, the global supply of zinc surplus 327,000 tons, the 2008 period of excess volume of 56,000 tons.　　The global surplus of zinc is estimated to be 380,000 tonnes in 2009, and the surplus in 2010 is 227,000 tonnes. From the perspective of aluminum, huge inventories at home and abroad underscore the excess of fundamentals this year. As of November 13, LME aluminum Inventory of 4.537 million tons, compared to 2.338 million tons at the beginning of the year increased by 94%. Shanghai aluminum inventory also reached 270,000 tons, up from the beginning of 200,000 tons increased by 35%. In terms of output, higher aluminium prices not only enabled companies to restart at the start of the year, but also launched new capacity, with October aluminum production reaching 1.26 million tonnes, a record high, up 17% per cent year-on-year.　　Brook Hunt predicts a global aluminum surplus of 1.66 million tonnes in 2009, estimated at 1.57 million tonnes in 2010.　　Prices will continue to move up the stock market and increase the price of metal in the contradiction between the sharp, analysis, this is related to future economic development prospects and consumption expectations. In theory, supply and demand determine prices, but prices tend to reflect the future expectations, in which investment demand or the industry's hidden inventory played a role. Historically, in the economic recovery and high growth stage, metal prices will be the main upside, the fundamentals of good or bad will only affect the extent of price increases. For now, the global economic recovery is stable, and the IMF's latest forecast is that the global economy will fall by 1.1% this year, but 2010 will rise 3.1%.　　The global economic growth above 3% indicates that the economy is in a state of expansion, in this context, the price of non-ferrous metals will still be the main tone.　　Return to the non-ferrous metals market itself, aluminum inventory in 4.5 million tons, but the Asian region of aluminum inventory rose has risen to 14 years the highest, to 115 U.S. dollars. According to the latest news, the first quarter of 2010 deliveries of raw aluminum will be higher than the current quarter, indicating that the spot market in the next few months to maintain tight supply.　　This shows that, although the stock is very large, but basically has been the financing and other means of locking, so only in the economic prospects change, the goods will return to the market. The same is true of the copper market. The latest news, although China's imports of copper trade is only 30-60 U.S. dollars, but next year's trade rose has been set to 85 U.S. dollars, higher than the 75 U.S. dollars this year. In addition, the supply of waste copper and copper concentrate problems remain. The latest figures show that China's imports of scrap copper have again fallen sharply at the end of the year the industry is widely believed to remain tight next year, copper ore processing costs have dropped to 1 digits, next year China's annual processing costs may fall by 40%, from this year's 75 dollars/ton and 7.5 cents/pound to 45 U.S. dollars/ton and 4.5 cents/pound,　　The supply of raw materials will still be supported by the price of copper.　　The uncertainty is that the liquid non-ferrous metals market will continue to rise in the context of economic recovery, the biggest risk is that the Chinese and American countries to shrink liquidity. Because the price of copper rose this yearThe main reason for this is that countries have implemented aggressive fiscal and monetary policies, and inflation concerns have attracted a lot of investment demand. But for now, the global economy has begun to recover, and the market has become increasingly concerned about the unconventional measures this year will spark inflation, and has been discussed by governments, central banks and international financial organizations since August, although it is now widely accepted that exit liquidity is still premature,　　But the agenda for withdrawing liquidity has been put on schedule. The biggest problem at the moment is the economic growth structure. China's GDP grew by 8.9% in the third quarter, but economic growth was driven mainly by government investment and consumer stimulus programs, and private investment and exports have not yet started. The US unemployment rate has reached 10.2% per cent since 1983 and consumer confidence remains low, and the US financial and commercial real estate problem remains. In this context, the timing of the two major countries to shrink liquidity is the biggest risk in the global economy, if the next year under inflationary pressure, the government forced to shrink liquidity, the global economy may dip two times, which will be a turning point in metal prices. Of course, if it is because the economy has been benign growth and the government is preventing inflation from flowing, the rally will continue. For the moment, we tend to be more likely to be the first.