1.Trend analysis

On December 6, domestic copper prices fell first and then rose. As of the end of the week, the price was 47,286.67RMB/t, down 0.18% from 47,373.33RMB/t at the beginning of the week, 1.81% lower than the beginning of the year, and 4.18% lower than the same period last year.

2. Market analysis

Copper and copper price: at the beginning of this week, the Shanghai copper index started to strengthen after jumping short and opening high. After the price rose 47,540RMB, it fell back to close at 47,370RMB, up 0.98%. At the beginning of this week, LME copper rose first and then suppressed in March, and the price rose $5968 at one time. It was under pressure in the middle of the week, and closed at $5882, up 0.50%.

Supply side: Freeport signed with Jiangxi copper, Tongling Nonferrous and China copper a long TC price of $62 per ton in 2020, which is close to the average TC spot price this year, reflecting the market's expectation of tightening the mine end. However, at present, the production volume of domestic smelters has not yet had a substantial impact on production. In October, the domestic electrolytic copper output was 783,000 tons, still increasing by 3.12% on a month on month basis. According to the normal production schedule of the smelter, the output is expected to increase to 786,600 tons in November.

In terms of demand: Although China is facing a seasonal off-season of consumption after entering December, the sales of cars and home appliances in China have improved, and the operating rate of wire and cable enterprises has increased year on year, ‘the off-season is not too light’.

On the macro level, the shrinking trend of global manufacturing industry has been curbed, China's official manufacturing PMI has returned to the top of the boom and bust line, and the PMI of many European countries has also recovered, and the operation of releasing capital flows of many countries has achieved initial results.

3. Future prospects

Based on the above situation, the copper analyst of the non ferrous branch thinks that the copper market is in a tight balance and the supply and demand contradiction at the copper end is obvious. Meanwhile, the three major inventories of the global copper market, including the bonded area inventory, are all at a low level, which supports the bottom of the copper price. Copper price is expected to maintain a narrow range of volatile trend.

Relevant lwasted enterprwases: Jiangxi Copper Industry (600362), Tongling Nonferrous Metals (000630), Yunnan Copper Industry (000878).

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.