Price trend

As shown in the figure above, copper prices rose slightly this week. As of the end of this week, the spot copper quotation was 69,245 RMB/ton, up 2.34% from the price of 67,660 RMB/ton at the beginning of the week, and down 6.32% year-on-year.

According to the weekly rise and fall chart of SunSirs, in the past three months, copper prices have risen by 7 weeks and fallen by 4 weeks, with a slight rebound in copper prices dominating the recent period.

Analysis review

Macroscopically: US Treasury Secretary Yellen changed his tone and said that "we are prepared to take action to protect deposits when necessary.". This aspect has boosted market confidence, with the three major US stock indexes showing a slight increase on the 23rd. Copper prices also showed a corresponding strengthening. The Federal Reserve raised interest rates by 25 basis points and suggested that the increase was nearing its end, in line with market expectations.

Supply side: The delivery and transportation of copper concentrates had been improved, raw materials had been loosened, new refined copper production capacity had been put into operation, and supply was expected to improve. However, from March to May, smelter maintenance will increase. There were smelting enterprises in Gansu, Guangdong, and other places that were undergoing maintenance, and the output was slightly affected, while other smelting enterprises operated normally. It is expected that the production change will not be very significant this week. The relatively intensive periods of refinery maintenance in 2023 are May and September.

Demand side: Last week, the market fell and copper rod construction rebounded, but there was a suspicion that consumption was overdrawn ahead of schedule. After the rebound in copper prices this week, copper rod construction declined somewhat. Overall, demand did recover, but still fell short of expectations.

Market outlook

To sum up, copper is currently on the trend of destocking and demand has recovered, but it remains to be seen whether the terminal order situation can continue in a good trend. It is necessary to pay attention to the risk that the expectations in the peak demand season of the second quarter cannot be realistically fulfilled. At the same time, the impact of current overseas macro disturbances on copper prices cannot be completely ignored. Copper prices are expected to fluctuate to be stronger in the short term.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.