On the 22nd, spot copper was quoted at RMB 52,380/ton, up 0.21% from the 21st, up 6.83% from the beginning of the year, and up 11% year-on-year. The three-month LME copper contract opened low and oscillated, until the Asian market closed at US$6972.5, a decrease of 0.34%; the main Shanghai copper market adjusted back to RMB 52,150 after the opening and maintained a low and narrow range operation, closing at 52,280 yuan, an increase of 0.25%.

The Candelaria copper mine in Chile has suspended operations from Tuesday. On Monday, Codelco workers took to the streets and refused to announce layoffs during the COVID-19 pandemic. On Wednesday, Reuters reported that China may buy copper reserves. According to reports, at a meeting of Chinese leaders next week, it may approve reserves of commodities such as copper. Citi analyst Max Leighton said that in the next five years, Chinese state-owned buyers may gradually buy 700,000 tons of copper, bringing the inventory to 90-day net imports. In the first nine months of 2020, China's imports of unwrought copper and finished products reached 4.99 million tons, an increase of 41% year-on-year, exceeding the total import volume of 2019. Some of the copper comes from stock exchanges. In the short term, the market follows the macro sentiment triggered by the progress of the US stimulus plan. Under the circumstances of abundant global liquidity, there is limited space under the copper price.

Based on the above situation, the copper mine strikes and there are expectations for copper purchases and reserves, but the macro uncertainty and lack of bright spots in demand, short-term copper prices may be strong.

Related listed companies: Jiangxi Copper (600362), Tongling Nonferrous Metals (000630), Yunnan Copper (000878).

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