Price trend

As the chart above shows, copper prices fell slightly this week. As of the end of this week, the spot copper price was 63,090 RMB/ton, down 0.72% from the price of 63,550 RMB/ton at the beginning of the week and down 8.71% year-on-year.

Analysis review

According to the weekly change chart of SunSirs, in the past three months, copper prices rose for 6 weeks and fell for 6 weeks. Recently, copper prices are still volatile and weak.

Macro: At 2:00 a.m. on Thursday, September 22, Beijing time, the Federal Reserve announced its September interest rate decision as scheduled, raising interest rates by 75 basis points again. The Fed's 75 BP hikes were in line with market expectations, and the Fed's determination to fight inflation remained unchanged. The Russian-Ukrainian conflict continued to escalate, the logic of inflation trading still existed, and Europe was about to enter the winter, and the trade of hyping the energy crisis was expected to reopen. The macro is currently intertwined with long and short positions, and there is a risk of stagflation.

Supply side: TC prices were rising, and the upstream spot supply was loose. The price of smelting acid fell, which led to a decline in smelting profits, and the release of refined copper supply slowed down. The profit window of imported copper was closed, which was affected by typhoon "Xuan Lannuo", which hindered the arrival of imported goods into storage.

Demand side: Affected by multiple factors such as real estate, the epidemic, and exports this year, industries such as home appliances and power tools have always been in a downturn.

In terms of inventories: on September 22, the copper on the Shanghai Futures Exchange decreased by 1260 tons to 6686 tons. On September 22, LME copper inventories increased by 4,775 tons to 122,775 tons.

Market outlook

To sum up, the macro is bearish and the supply side is loose. There are still expectations for "golden September and silver October", and it need to pay attention to the replenishment situation before the National Day. Domestic inventories are low, and LME copper inventories have risen sharply recently. It is expected that copper prices will maintain a wide fluctuation trend in the short term.

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