1、 Trend analysis
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Since the beginning of the year, the copper price fell to the lowest point of 36560 yuan / ton on March 23 this year, and then continued to rebound. As of July 9, it rebounded by nearly 40 points. The current copper price is 50620 yuan / ton, up 1.51% compared with the previous trading day, 3.24% higher than the beginning of the year, and 9.46% higher than the same period of the same year. On July 9, LME copper rose 1.40% to $6323 at the end of the Asian market. Shanghai copper’s main force rose after the opening, closing at 50700 yuan, up 1.81%.
2、 Market analysis
Increased supply risk
Chile’s recent outbreak of the epidemic, Chile’s mining Minister stressed that miners’ health is better than copper production overnight. Chile’s National Association of mining workers said that workers in large copper enterprises had more than 3500 confirmed cases, and the trade union called for production suspension. The Chilean copper trade union is considering seeking a two-week industry wide shutdown. The chairman of the Federation of trade unions of Antofagasta mining company said that seven trade unions representing about 80% of the workers and contractors of Chile’s copper mines were discussing whether to formally request the government to stop all Chilean copper mines for 14 days. If the resolution of the copper trade union to stop production of all copper mines for 14 days is finally passed, the production will be affected by more than 200000 tons, which will have a great influence on the market.
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However, at present, the government has only replaced workers in two shifts to meet the needs of trade unions without affecting copper production. Moreover, Chile’s mines are mostly located in the northern desert, far from the densely populated center. The political situation in Chile also makes the Chilean government more likely to maintain mine production as much as possible. China mainly imports copper concentrates from Chile and Peru. At present, the impact of the epidemic situation in Peru, the largest importing country, has been improving, but the logistics problem is still prominent. Other import places, such as Africa, have little impact at present.
Recently, the supply risk of Chile’s mines is relatively high. China’s copper concentrate dependence on foreign countries is around 80%, and 50% of the 80% comes from South America. The supply speculation promotes the copper market to continue to rise.
Copper inventory reduction
Copper stocks are also shrinking. Domestic copper inventory fell 70% from the year’s high and 19% year-on-year. Favorable ore end, superimposed reserve expectations, good fundamentals, so that copper prices close to the high year ago.
Orders of processing enterprises are not optimistic
Among the more than 40 copper processing enterprises in East China and North China, most of the feedback orders are not optimistic and dare not keep bullish on the copper price. Some enterprises even said that they had no orders in May and had already rested in June. Only a few copper alloy enterprises had relatively good orders. In the case that domestic refined copper output continues to increase instead of falling, the demand side orders can not be effectively alleviated. Even if the spot copper price rises with the lead time, the shipholders will also significantly discount the shipment, and the situation of price with price but without market will be prolonged.
3、 Future prospects
In view of the above situation, the copper analysts of the nonferrous metals branch of the business association believe that: the macro expectations for good and the supply side tightening expectations resonate, and the copper prices remain relatively strong in the short term, but be wary of the off-season risks of domestic demand.
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