Source: Jintou.com
Copper prices fell slightly this week. As of the end of this week, the spot copper price was 66,345 yuan/ton, down 1.97% from 67,680 yuan/ton at the beginning of the week, and down 5.79% year-on-year.
According to SunSirs’ weekly price chart, in the past three months, the price has risen by 6 and fell by 5 to 1. The recent copper price has risen slightly after a slight correction.
On the macro level: the State Council’s joint defense and joint control mechanism: resolutely opposes the two tendencies, and continues to rectify the “level increase”; the Fed’s “big hawks”: need to raise interest rates further to reach the “restrictive level”, at least 5%-5.25%, Rate hikes have had limited impact on inflation so far. Recently, Fed officials came out to express their hawkish stance. The Fed will raise interest rates further, and the 50BP rate increase is also a substantial rate hike. Therefore, the decline of the US dollar has slowed down, and copper prices have also been under pressure.
Supply side: LME does not restrict Russian metal delivery, 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 the Fujian market in South China is over, and the output is gradually picking up. However, although the epidemic disturbance in Henan, Xinjiang, Liaoning, Inner Mongolia and other places continued, it did not affect production. The more impact lies in the speed of transportation and delivery. Therefore, the output of electrolytic copper will continue to increase slightly in the short term.
Demand side: In the short term, the rapid rise of copper prices has also caused some damage to downstream consumption, and it is difficult to support copper prices to continue to rise sharply.
In terms of inventory: on November 17, copper in the previous period rose by 9592 tons to 59025 tons compared with the beginning of the week. LME copper inventories rose 3,125 tons to 80,025 tons, an increase of 3.6% from the beginning of the week.
To sum up, the current macro-environment is neutral, the overhaul is over, and domestic copper production has picked up. Although the inventory has increased, it is still at a low level, which supports copper prices. Downstream demand is average, and it is expected that short-term copper prices may fall into a weak and volatile pattern.
(Article source: SunSir)
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