Source: www.jintou.com
Copper prices have fallen slightly this week. As of the end of this week, the spot price of copper stood at 66,345 yuan/ton, down 1.97% from 67,680 yuan/ton earlier this week and down 5.79% year on year.
According to SunSirs weekly price chart, in the last three months the price has increased by 6 and decreased by 5 to 1. The recent price of copper has increased slightly after a slight decline.
At the macro level: the joint defense and joint control mechanism of the State Council: resolutely opposes the two trends and continues to rectify the “level increase”; the Fed’s “big hawks”: need to further raise interest rates to reach the “tightening level”, at least 5%-5.25%. So far, rate hikes have had a limited impact on inflation. Recently, Fed officials have voiced their hawkish stance. The Fed will raise interest rates further, and the 50BP rate hike is also a substantial rate hike. Thus, the decline of the US dollar has slowed down and copper prices have also been under pressure.
Supply side: LME does not limit the delivery of Russian metal, which also reduces the risk of market squeeze, but domestic and foreign inventories are still at a low level and inventories have increased slightly this week. At present, the maintenance of copper smelting enterprises in south China’s Fujian market is over, and the production is gradually increasing. However, although the epidemic unrest in Henan, Xinjiang, Liaoning, Inner Mongolia and other places continued, it did not affect the production. The biggest impact lies in the speed of transportation and delivery. Therefore, the production of copper electrolyte will continue to increase slightly in the short term.
Demand side: In the short term, the rapid rise in copper prices has also caused some damage to downstream consumption, making it difficult to sustain copper prices to continue to rise rapidly.
In terms of inventory: On November 17, copper in the previous period increased by 9592 tons to 59025 tons compared to the beginning of the week. LME copper inventories rose by 3,125 mt to 80,025 mt, up 3.6% from the start of the week.
To sum up, the current macro environment is neutral, the revision is over, domestic copper production has increased, and although inventories have increased, it is still at a low level, which supports copper prices. Downstream demand is average and near-term copper prices are expected to be in a weak and volatile pattern.
(Article source: SunSir)
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