On July 22, China's spot copper price was 52,565 yuan/ton, an increase of 1.26% from the previous day, an increase of 7.2% from the beginning of the year, and a year-on-year increase of 10.33%. Shanghai Copper's main force opened early in the morning, surging 52,830 yuan and then fell back to close at 52,410 yuan, an increase of 1.04%. The 3-month LME copper contract rose slightly to $6,601.5 and then fell back. As of the Asian market closed at $6,572, an increase of 0.14%.
The EU recovery fund reached an agreement overnight, and the United States considered launching a new round of stimulus. The market's confidence in the expected economic recovery was boosted. Most commodities rose, and copper prices also rebounded slightly. Disturbances in mine-end supply continue. Domestic inventories have accumulated but overseas inventories have continued to deplete. The operating rate of refined copper rod enterprises in June was 78.66%, a decrease of 1.70 percentage points from the previous month and an increase of 3.01 percentage points year-on-year. The order concentration effect reflected in April continued to weaken in May and June, and the stock orders of enterprises decreased. Orders for refined copper rods are significantly impacted by scrap copper rods. It is expected that the operating rate of 7 refined copper rod companies will further fall to 76.79%. The current market has turned into a low season, downstream orders continue to decline, the average operating rate of processing companies is still not high, and downstream demand is relatively sluggish.
Based on the above situation, since the outbreak of the South American epidemic, the market has been concerned about the supply of copper ore and supported copper prices. July and August are the low season for downstream consumption, and orders are showing signs of weakening. Copper prices are expected to fluctuate mainly in the short-term.
Related listed companies: Jiangxi Copper (600362), Tongling Nonferrous Metals (000630), Yunnan Copper (000878).
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