Price trend

As shown in the above figure, copper prices slightly declined this week. As of the end of this week, the spot copper quotation was 68,746.67 RMB/ton, a decrease of 0.83% from 69,325 RMB/ton at the beginning of the week and a year-on-year increase of 9.87%.

According to the weekly rise and fall chart of SunSirs, in the past three months, it had been down for 5 weeks and up for 7 weeks. Recently, copper prices were fluctuating and weaker.

Analysis review

Macroscopically, the US CPI in July was 3.2% year-on-year, with an expected 3.3% and a previous value of 3%; the core CPI was 4.7% year-on-year, expected to be 4.7%, with a previous value of 4.8%. The data stabilized the expectation of suspending interest rate hikes in September, but later Federal Reserve officials commented that more work needed to be done, and the US dollar index rose after diving. The bottom of domestic policies had emerged, and the growth rate of imports and exports had dropped, indicating that domestic and foreign demand needed to be restored.

Supply side: The mining side remained abundant. The centralized maintenance of domestic smelting was completed in August, and production will return to a relatively high level. However, it will face centralized maintenance again in September. Long term orders of Russian copper continued to flow in, while the arrival pace of Lomo copper was lagging due to the impact of African transportation capacity. The import window was closed, and some smelters had export plans.

On the demand side: In terms of the power grid, both Southern Power Grid and State Grid had added new orders in July, and some orders would be delivered centrally in August; In terms of air conditioning, August gradually entered the off-season, with some enterprises entering the stage of equipment maintenance and vacation, and consumer support had weakened; In terms of real estate, the completion of the guaranteed delivery building was boosted in the early stage, but the front-end was still weaker, and attention needed to be paid to the implementation of relevant policies.

Market outlook

In summary, it is expected that domestic refined copper production will increase in August, which will put some pressure on supply. At the same time, demand concerns continued to suppress copper prices, and the weak spot consumption situation had not yet improved. LME inventory had rebounded, and the copper price is expected to fluctuate to be weaker mainly.

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