Price trend

As the chart above shows, copper prices rose this week. As of the end of this week, the spot copper quotation was 63,850 RMB/ton, an increase of 4.88% from 60,876.67 RMB/ton at the beginning of the week, and a year-on-year decrease of 7.31%.

According to the weekly change chart of SunSirs, in the past three months, copper prices rose for 5 weeks and fell for 7 weeks. Recently, copper prices fluctuated widely.

Analysis review

Macro: The European Central Bank raised all three major interest rates by 75 basis points, which was in line with market expectations and was the first significant rate hike by 75 basis points since 1999. In the U.S. non-farm payrolls data released last Friday, the unemployment rate rose more than expected and hourly wages were lower than expected month-on-month, which to a certain extent eased the market's expectations for the Federal Reserve to raise interest rates aggressively in July, and market sentiment improved. The U.S. closed Nord Stream 1 indefinitely, causing European energy prices to remain high, exacerbating market concerns about disruptions to the supply of non-ferrous metals in Europe.

Supply side: Due to the impact of high temperature power curtailment, the smelting output loss in August will reach about 40,000 tons. At present, the smelter returns to normal operation level after the impact of domestic power curtailment is lifted. Due to the delay in customs clearance of imported copper due to the typhoon, the spot market is still tight, and scrap copper is relatively small. The demand for wet copper and non-standard copper as substitutes is very good.

Demand side: The overall consumption boom is still high, driven by local infrastructure projects and new energy sectors, and real estate is still the main drag. With the continuous decline of copper prices, the spread of refined copper and scrap copper has also narrowed significantly. With the advantages of replacing scrap copper rods and the support of the cable sector, the operating rate of refined copper rods has rebounded.

Market outlook

To sum up, in September, with the weather improving and the traditional construction peak season approaching, the national demand is expected to further improve. In addition, under the background of favorable policies released by the National Convention, it is expected that market confidence is expected to be restored. Copper prices are expected to fluctuate to be strong.

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