The spot premium is strong, the price difference between fine and waste narrows, and the Shanghai copper range is narrowed, and empty orders are reduced on dips|Spot_Sina Finance_Sina.com

Source: GF Futures Author: GF Futures

Research report text

[Spot]On November 21, the average price of SMM1# electrolytic copper was 65285 yuan/ton, -990 yuan/ton month-on-month; the basis difference was 400 yuan/ton, +10 yuan/ton month-on-month. The average price of 1# electrolytic copper in Guangdong is 65,595 yuan/ton, -805 yuan/ton month-on-month; the basis difference is 665 yuan/ton, +30 yuan/ton month-on-month.

[Supply]On November 18, the imported copper concentrate index was at US$90.83/ton, an increase of US$0.28/ton week-on-week. Overseas smelting has continued to interfere; domestic production of refined copper in October was 901,200 tons, down 0.9% month-on-month and up 14.2% year-on-year. SMM predicts that domestic electrolytic copper production will be 903,300 tons in November, an increase of 2,100 tons month-on-month, an increase of 0.2%, and a year-on-year increase of 9.4%.

[Demand]According to SMM, on November 18, the weekly operating rate of major domestic refined copper rod enterprises was 64.64%, a decrease of 2.6 percentage points from last week. The operating rate of copper in October is expected to be 72.95%, a decrease of 1.21% from the previous month; the operating rate of copper pipes is expected to be 72.74% in November, an increase of 5.65% from the previous month; the operating rate of copper strips and foils in November is expected to be 75.08%, a decrease of 2.02% from the previous month; enameled wires will start in November The rate is expected to be 66.72%, a decrease of 0.21% from the previous month.

[Inventory]The global dominant inventory rebounded from a low level. On November 18, the social inventory of electrolytic copper in SMM was 128,000 tons, an increase of 23,300 tons week-on-week. SHFE electrolytic copper inventory was 85,800 tons, an increase of 9,600 tons week-on-week. The inventory in the bonded area was 24,600 tons, a decrease of 3,700 tons week-on-week. LME inventories were 89,800 tons, an increase of 11,900 tons week-on-week.

[Logic]The domestic output of refined copper exceeded 900,000 tons in October, and the overall demand is resilient. The price difference of fine waste narrowed, and the advantage of scrap copper substitution declined; warehouse receipt resources flowed out, downstream entered the market to purchase and replenish warehouses, and spot premiums were strong.

Near the end of the month, the contradiction between high positions and low warrants still exists. On the whole, high prices at the top suppress downstream demand, while low inventory at the bottom supports it, and it is viewed as a range shock. At the same time, the import window opens,Shanghai CopperThe monthly gap has narrowed, Lun Copper has turned to discounts, and the sentiment of the bulls has cooled down, so we don’t see a rise for the time being. The main focus is on the support of 64,000 yuan/ton.

[Operation Suggestions]Short positions in the interval reduce holdings on dips, and the main focus is on the 64,000 support.

[Short-term view]Cautiously bearish.

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