[Il mercato va matto per il basso inventario di rame]
The US stock market began a deep recovery this week, but the Dow Jones Industrial Index had a better upside. The rebound directly broke the back pressure of the quarterly line and the tech equity index was still subject to the back pressure from the monthly and Quarterly Lines Electronic stocks in the Taipei stock market want to rebound, but have always felt they were being held back.
Compared to traditional stocks, many stocks have hit a low for more than 3 months due to the previous pullback, so if fundamental information does not deteriorate further, the share price will be more stable than electronic stocks. Today, let’s talk about the less than 3-day information that emerged from copper stocks a while ago and see which stocks will benefit when copper supply outstrips demand in the future.
The news comes from a Financial Associated Press report in which Trafigura, a multinational trading group, said that the current inventory of the copper market can only be used for 4.9 days of global consumption and that by the end of this year might be able to consume 2.7 days of overall consumption. The reason for the sharp decline in copper mine inventory is mainly due to the increasing application of copper in new energies, resulting in an upward trend in demand year after year.
Since it is related to the production of raw materials, we obviously need to understand the situation of supply and demand. Let’s take a look at the supply side first. From 2021 to 2023, world copper mining production will increase by 1.9%, 3.9% and 5.3% respectively, but global refined copper production will only increase by 0.1%, 2.1% , 0.8%, 2.8% and 2.8% from 2019 to 2023 respectively.3.3%, while world production of copper mines is expected to increase to 23.67 million tons in Ming (2023).
Let’s take a look at the demand side again. In addition to the original infrastructure needs, the demand for copper in the green energy sector is projected to increase to 28.5 million tons by 2030 and by 2050 the demand for copper will reach 53 million tons per year.
[Si prevede che questi titoli trarranno vantaggio dallo squilibrio tra domanda e offerta]
So is this in short supply or, as some Conservatives have said, will there be an oversupply in the next year? We can simply try to calculate that if supply grows at an annual rate of 3%, supply is expected to decrease by around 29 million tonnes by 2030. This figure is not very different from the current market demand of 28. , 5 million tons. , I believe that the growth trend of copper mining and refined copper production must belong to the long-term pattern of line formation, but the demand side, be it electric vehicles, wind energy, power plants, etc. . new energy applications are everything This is double-digit growth, so although supply and demand appear to be in balance at the moment, there is a high probability that there is a seasonal shortage.
Therefore, the price of copper has the opportunity to increase in the future, and companies with copper stocks in their hands have the opportunity to directly benefit from it. Most of these companies are wire and cable related companies. With the recent stock price trend, I have selected 5 files for reference.
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Hua Rong (1608):The stock price of the old wire and cable company just crossed the monthly line from the low, but the stock price is still below net worth and the price / book ratio is around 0.8. There are signs of subsidence.
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First copper (2009):Mainly engaged in cutting and trading of copper foil and copper wire is the Huarong reinvestment company. The ratio of the share price to net worth is around 1.8 times, but the ratio of the shares to equity reaches 53%. and there are signs of exhaustion.
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Daya (1609):The old wire and cable company has transformed into green energy projects in recent years. In the first half of the year, EPS was 0.25 yuan and the price / book ratio was around 1. The share price was trading sideways at a low, with signs of a low.
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Huaxin (1605):The Huaxin Group’s stock, wire and cable index is the old line. In recent years it has entered the stainless steel and nickel ore industry and has great long-term potential. In the first half of the year, the EPS was 2.71 yuan, and the price / book ratio was about 1.8 times.
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Hongtai (1612):The old wire and cable company has an EPS of 0.45 yuan in the first half of the year.The current share price is less than the net value, and the price / book ratio is about 0.6 times.
【A rise in prices is a signal for a rising wave】
Judging by the trend in the share price of the 5 stocks mentioned above, most of them are hitting a low in the low end. Earnings data are also not too important. However, the commodity group’s share price pushes up momentum, which is directly related to the listing. If the price of copper rises in the future, these related stocks will perform again and investors may want to put them on the watch list. Good luck with your investment.
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Engaged in the financial and securities industry for nearly 20 years, qualified securities analyst, currently chief investment officer of Zhongying Wealth, financial advisor to CMoney Quanyao, financial editor and lecturer at the Securities Foundation, Zhongzheng Community University and Star Cloud Academy, Yahoo wealth column of management, business Special author of Zhou Fortune.com.
The investment mindset focuses primarily on the long-short cycle of the economy as a whole and combines fundamental stock selection with technical operations; it is believed that “selecting the opportunity to enter the market” is the method of profiting from investing on the stock exchange. There are currently 2 books: “Trust Me, You Can’t Make Enough Money” and “Taiwan’s Shareholder Calendar”.
