Price trend

As shown in the above figure, copper prices fell first and then rose this week. As of this weekend, the spot copper quotation was 68,555 RMB/ton, a decrease of 1.76% from 69,783.33 RMB/ton at the beginning of the week and a year-on-year increase of 3.47%.

According to the weekly rise and fall chart of SunSirs, copper prices have fallen for 5 weeks and risen for 6 weeks in the past three months. Recently, copper prices have rebounded and slightly declined.

Analysis review

LME copper inventory: According to SunSirs, LME copper inventories had fluctuated at high levels and remain at a relatively high level.

Macroscopically: Moody's downgraded domestic credit rating, Goldman Sachs warned the market that the Fed's interest rate cut forecast was too high, the US November ADP employment data was lower than expected and before, coupled with weak oil prices, and optimistic expectations both inside and outside the market were revised in the early stage. Further monitor the US November unemployment rate and non-farm payroll data released on Friday.

Supply side: In October, China's electrolytic copper production was 993,800 tons, a decrease of 18,200 tons month on month, a decrease of 1.8%, and a year-on-year increase of 10.3%. In November, the domestic electrolytic copper production was 1.012 million tons, an increase of 7,400 tons month on month or 0.74%, a year-on-year increase of 11.3%. The spot processing fee TC for imported copper concentrate continued to fall, and the disturbance in overseas copper supply had increased. In addition, China's smelting capacity continued to expand, leading to an increase in raw material procurement and an increase in refined copper production. The domestic supply of recycled copper was loose, the profit from imported recycled copper had expanded, and the price difference of refined waste had significantly fallen, still above the breakeven point.

On the demand side, the operating rate of precision copper rods was 67.7% last week, a decrease of 6.32 percentage points compared to the previous week; The operating rate of recycled copper rods was 51.39%, with a week-on-week increase of 5.73 percentage points. The demand was resilient, and downstream stocks were replenished at low prices. However, high premiums suppressd the operating rate of enterprises, and some enterprises chose to shut down boilers and reduce production.

Market outlook

In summary, the absolute inventory on the spot end was still low. Domestic supply remained roughly stable in the short term, while imports to ports remained at a high level; The expected weakening of new orders on the consumer end and the easing of renewable supply are not conducive to the consumption of refined copper. Under the expectation of the off-season, the overall procurement activity remains weak. It is expected that the copper prices will be mainly volatile in the short term.

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