Funds pulled away from risky markets, metals plummeted

The monetary impact is the core factor that determines the base metals of the next year. From the current market perspective, with the wave of selling by Western hedge funds and other investors, the metal price has triggered the most dramatic fluctuations in people's memory.

Nowadays, under the various circumstances of the escalation of the debt crisis in the euro area, investors are no longer willing to expect the bottom of metal prices to rebound. The sporadic reports of weaker demand have made the metal market even more bleak. The monetary impact is mainly reflected in inflation and capital flow. Inflation mainly depends on money supply and CPI. Capital flow mainly depends on the exchange rate.

From China's M2 forecast, the future trend of M2 is low and high, and the money supply has changed from tight to normal. Judging from China's CPI trend forecast, next year's CPI trend shows a downward trend, and inflation pressure is gradually eased.

Therefore, from the perspective of inflation, China's monetary tension is expected to ease, and the impact on basic metals is clearly positive.

Last week, the base metal price continued to fluctuate and the LMEX index fell by 1.44%. The new Italian and Greek governments took office to temporarily placate the market, and then the yields on the national debt of euro zone countries such as Italy have soared again, causing further market anxiety. The Eurozone’s industrial production in the September and GDP growth in the third quarter both declined. On the whole, the price trend of base metals is still weak, and the medium term will be treated with shocks.

Recently, the "12th Five-Year Plan" of the "non-ferrous metal industry" has been finalized and submitted to the Ministry of Industry and Information Technology. In addition to total control and structural adjustment, the “Planning” also made special plans for the development of strategic small metals such as tungsten, molybdenum, tin, antimony, and rare earths, and proposed the establishment of a complete national reserve system. It is reported that small metals such as tungsten, molybdenum, tin, antimony, and rare earths will be individually planned under the framework of the “12th Five-Year Plan”. In addition to proposing to continue controlling the total volume, the "plan" also proposes to establish a complete national reserve system. The introduction of this state policy will allow some small metals to turn over smoothly.