Price trend

According to the monitoring data of SunSirs, the copper price in October showed a wide fluctuation trend. The copper price was 62,670 RMB/ton at the beginning of the month, and rose to 64,638.33 RMB/ton at the end of the month, with an overall increase of 3.14% and a year-on-year decrease of 8.62%.

Analysis review

According to LME inventory, LME copper inventory rose first and then fell in October, higher than that in September.

Macro: In October, the European Central Bank raised three major interest rates by 75 basis points. The Federal Reserve announced its September interest rate resolution as scheduled, raising interest rates by another 75 basis points. The US reported that the CPI in September was the focus of the financial market. The CPI rose 8.2% in September, down 0.1 percentage points from the previous month.

On the supply side: the risk of supply disturbance still existed. LME discussed the possibility of banning Russian metal trading, and this was the focus of LME annual meeting. The supply of copper concentrate was relatively loose, and the processing cost of spot concentrate continued to increase, which had exceeded 80 US dollars, slightly better than 70-75 US dollars in the first half of the year. The new production capacity was put into operation. The domestic refined copper output in September was 909,000 tons, up 6% month on month and 13% year on year. The supply pressure gradually increased in the later period.

Demand: In September, more than 1.5 trillion RMB of infrastructure projects were intensively started, infrastructure investment was further boosted, and infrastructure in the fourth quarter was expected to enter a new round of construction strengthening stage. The investment in electricity and new energy vehicles continued to grow at a high speed, especially in solar and wind power; Household appliances remained flat on the whole, with a slight positive increase in the output of air conditioners; The real estate continued to grow negatively, and there was no sign of stabilization.

Market outlook

To sum up, the weak US economic data boosted the expectation that the Federal Reserve would slow down its interest rate hike position, and the dollar index fell to a new low in nearly a month, improving the macro atmosphere. The supply of copper concentrate in China is becoming increasingly loose, and downstream enterprises are still afraid of high prices, further limiting the rise of copper prices. November is the traditional slack season in China, and the demand may be limited. However, the possibility that LME may ban Russian metals greatly supports copper prices. It is expected that copper prices in November will continue to operate mainly in a wide range of shocks.

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