Price trend

As shown in the above figure, copper prices had fluctuated and risen this week. As of the end of this week, the spot copper quotation was 69,885 RMB/ton, an increase of 1.14% from the 69,100 RMB/ton at the beginning of the week and a year-on-year increase of 10.33%.

According to the weekly rise and fall chart of SunSirs, copper prices had fallen by 5 weeks and risen by 7 weeks in the past three months, and it still slightly increased recently.

Analysis review

On Wednesday, copper registered warehouse receipts from London Metal Exchange (LME) registered warehouses reached their highest level in about a year, the latest signal of ample supply and weak demand. LME data showed that the registered copper warehouse receipts for LME registered warehouses had increased by 5.7% on Wednesday, reaching the highest level since May 2022.

Macroscopically, the resilience of US economic data had fueled a collective rise in the stock market, while the central bank's reserve requirement reduction had boosted market sentiment. Domestic social inventory had once again shifted towards deleveraging to provide price support. The continuous implementation of favorable policy dividends for real estate in China had brought warmth to the real estate industry, boosting the steady growth of the construction industry and other fields, especially in building materials, home appliances, and home related commodities, which had been boosted, providing support for copper prices.

Supply side: Overall abundant supply. In August, China's electrolytic copper production reached 989,000 tons, an increase of 63,100 tons compared to the previous month, a growth rate of 6.8%, and a year-on-year increase of 15.5%; In September, 5 smelters had maintenance plans, but the actual impact was not significant. In addition, new smelters were put into operation in East China, with an estimated production capacity of 986,100 tons in September; there were not many smelters undergoing maintenance in the fourth quarter, and the large ones undergoing early maintenance would also resume production, with a monthly production potential exceeding one million tons.

On the demand side: There was a demand for replenishment during the golden September and silver October peak seasons. Last week, the operating rate of refined copper rods was 70.25%, with an increase of 1.28 percentage points compared to the previous week; the operating rate of recycled copper rods was 40.94%, with an increase of 0.87 percentage points in the circumferential ratio.

Market outlook

In summary, the central bank had lowered reserve requirements and lifted purchase and sales restrictions in many places, but the actual effect of implementation remained to be observed. LME inventory was continuously accumulated, while in China, both supply and demand were booming, with production reaching a new high in August. Some manufacturers was undergoing maintenance in September, but the impact was not significant. The traditional peak season atmosphere of golden September and silver October was insufficient, and inventory levels had slightly increased. It is expected that copper prices will continue to fluctuate in the short term.

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