Price trend

As shown in the figure above, copper prices fell slightly this week and then rose. By the end of this week, spot copper was offered 64,616.67 RMB/ton, up 1.32% from 63,776.67 RMB/ton at the beginning of the week, and down 9.44% year on year.

According to the weekly ups and downs chart of SunSirs, in the past three months, the copper price rose for 6 weeks, fell for 5 weeks, and remained flat for 1 week. Recently, the copper price fluctuated in a narrow range.

Analysis review

Macro: The Federal Reserve raised the interest rate by 75bp as scheduled. Powell suggested that the pace of interest rate increase might slow down, but the high point of interest rate would be higher, and the interest rate would stay at the high point for a longer time, which was slightly hawkish and weakened risk appetite. The Bank of England raised interest rates by 75 basis points as scheduled, the largest rate in 33 years, emphasizing that the peak interest rate would be lower than the market expectation; In October, the ISM non manufacturing industry in the United States hit a new low since May 2020, which coincided with the downturn of the manufacturing industry.

Supply side: the supply of copper concentrates was loose, and the domestic refined copper output was increasing steadily. It is estimated that the output in October will exceed 930,000 tons, and imported copper arrived in succession, and the supply pressure gradually increased; However, the supply of scrap copper was still disturbed by the epidemic.

Demand side: Traditional and emerging demand are in balance. Downstream procurement will increase after copper price falls, while a sharp rise will restrain procurement. Lower the absolute value of inventory.

In terms of inventory: on November 3, the copper in the previous period decreased by 7,500 tons to 19,124 tons compared with the beginning of the week. LME copper inventory fell 19,150 tons to 93,975 tons, down 16.9% from the beginning of the week.

Market outlook

To sum up, short-term macro expectations are repeated, and low inventories support copper prices. At present, the supply and demand are still in a tight state, but domestic downstream consumption is weak. In the case of the rising voice of European ban on imports, Russian copper may turn to our country. The supply and demand may slow down, and copper price is expected to maintain a narrow volatility trend in the short term.

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