1、 Trend analysis
On February 18, spot copper soared sharply, with a price of 62793.33 yuan / ton, up 4.13% from the previous trading day, 8.35% from the beginning of the year, and 36.59% from the same period last year, reaching a ten-year high. LME3 copper rose sharply today, closing at US $8590.5, up 2.39%. The main trend of Shanghai copper showed an upward trend, with the highest closing at 63290 yuan and the final closing at 63210 yuan, up 3.96%. The main international copper contract rose sharply, closing at 56410 yuan, or 4.21%.
Outside market up
During the Spring Festival holiday, the external market continued to soar, and the dollar index hit a three week low, which brought support to the metal market. Among them, the international copper price hit a new high in more than eight years. London Metal Exchange (LME) copper futures hit a multi-year high for the third consecutive trading day, and copper prices have risen 93% since March last year.
Supply is tight
In 2021, the supply of copper concentrate is already tight. The long-term single tc60.8 US dollars / ton, and the spot tc50 US dollars / ton. Compared with the continuous expansion of copper smelting capacity, the supply of copper concentrate is limited. At the same time, in the middle and late January, there were interference events such as Peru blockade again, Chile port storm and Las bambas copper mine blocked by the public, which made the actual supply of copper concentrate may still be lower than the original market expectation. From the perspective of seasonality, the production of refined copper is off-season from January to February. In the first quarter, domestic smelting maintenance is more concentrated, and the shortage of raw material supply may further restrict the actual output, so the refined copper output is difficult to rise significantly.
Strong demand
Under the proposal of celebrating the Chinese new year on the spot, copper demand may recover quickly after the festival, and the actual consumption is obviously better than in previous years. In terms of inventory, the average accumulated stock in January of the past four years was 14600 tons, while the stock in January 2021 was reduced by 12800 tons. According to the survey, the orders in the first quarter were relatively full, which reflected that the spot demand was really strong.
To sum up, in the case of relatively healthy supply and demand side, copper inventory may hover at a low level for a long time. After the Spring Festival, copper demand is about to enter the peak consumption season. At the same time, under the background of low overall dominant inventory, copper price has sufficient momentum to rise.
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