Price trend

As the chart above shows, copper prices fell slightly this week and recovered slightly over the weekend. As of the end of this week, the spot copper price was 60,458.33 RMB/ton, down 1.81% from 61,571.67 RMB/ton at the beginning of the week and down 13.26% year-on-year.

According to the weekly change chart of SunSirs, in the past three months, it rose for 4 weeks and fell for 8 weeks. The copper price has rebounded slightly after the recent sharp decline.

Analysis review

On the macro side, the Fed raised interest rates by 75BP as scheduled, and other related expressions were in line with expectations, but recently, Fed officials continued to speak hawkishly, raising the probability of raising interest rates by 75BP in September, and the dollar index rebounded. Data released by Eurostat on the 3rd showed that retail sales in the euro zone fell by 3.7% year-on-year in June, the largest decline since February 2021. Eurozone gross domestic product (GDP) grew by 0.7% month-on-month in the second quarter, while EU GDP grew by 0.6% month on month. Consumer demand in the euro area has fallen markedly, and business activity is also showing signs of slowing due to persistently high inflation.

Fundamentals: Global copper smelting activity decreased in July, and the global copper dispersion index fell to 46.5 from 46.7 in the previous month. However, the maintenance of domestic smelting enterprises has basically ended, the arrival volume has increased, the domestic supply has become loose as a whole, and the inventory has rebounded. This week, the transaction of refined copper rods was general, and the downstream cable companies were generally less willing to buy goods, mostly just needed to buy, and the transactions were concentrated in the market at low prices. Domestic demand is expected to improve in August, the willingness to replenish downstream inventories has risen, inventories have fallen, and premiums have risen, which is expected to promote a rebound in prices.

Market outlook

To sum up, domestic smelting is over, and supply is expected to be loose. There may be a slight improvement in demand in August, but the magnitude is limited. Under the circumstance of strong supply and weak demand, it is expected that copper prices will maintain a slight fluctuation trend.

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