Price trend
As shown in the above figure, copper prices had slightly decreased this week. As of this weekend, the spot copper quotation was 77,440 RMB/ton, a decrease of 1.89% from 78,933.33 RMB/ton at the beginning of the week and a year-on-year increase of 15.68%.
According to the weekly rise and fall chart of SunSirs, in the past three months, copper prices have fallen for 7 weeks and risen for 5 weeks, with a slight decline this week.
Analysis review
LME copper inventory
According to data released by the London Metal Exchange (LME, LME copper inventory has slightly decreased, with 299,350 tons of LME copper inventory as of the weekend, a decrease of 0.27% from the beginning of the month.
Macroscopically, the US CPI rose 2.4% year-on-year in September, slightly higher than market expectations of 2.3%, revealing the existence of inflationary pressures in the current economy. What is even more remarkable was that the core CPI increased by 3.3% year-on-year, not only exceeding market expectations, but also higher than the previous value of 3.2%. This data undoubtedly exacerbated market speculation and concerns about the future direction of the Federal Reserve's monetary policy.
Supply side: The supply of raw materials on the supply side was still tight, and there were disruptive factors overseas, resulting in lower actual copper smelting and processing fees. The production of refined copper remained high in September, and the social inventory of refined copper accumulated as scheduled during the holiday period.
On the demand side: Entering October, although it is the traditional peak season for consumption, there has been a slight decline in consumption compared to before the National Day holiday. On the one hand, high copper prices have suppressed downstream interest in replenishing inventory; On the other hand, the optimistic sentiment stimulated by national policies is gradually fading, and the market is beginning to return to the actual trading surface. Market participants are more concerned about whether the recent major favorable policies in China can effectively improve the real estate market and realize its potential.
Market outlook
In summary, the decline of macro optimism was the dominant factor in the trend of copper prices. The bullish risk aversion sentiment has risen as investors reassess the potential impact of China's economic stimulus plan on industrial metal demand. The uncertainty of demand prospects has triggered a new wave of selling, causing copper prices to continue to fluctuate and adjust. In the short term, it is expected that copper prices will fluctuate within the range of 76,800-77,800 RMB/ton.
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