1、 Trend analysis

This week, copper prices rose first and then fell, with narrow fluctuations. As of this weekend, the spot copper quotation is 68661.67 yuan/ton, an increase of 0.04% from the beginning of the week’s 68635 yuan/ton and a year-on-year increase of 4.88%.

According to the weekly chart of ups and downs by Business Society, in the past three months, copper prices have fallen by 5% and risen by 6%. Recently, copper prices have rebounded slightly.

LME copper inventories have fluctuated at high levels and are still at a relatively high level, with a slight decline.

Macroscopically, the pace of the Federal Reserve’s monetary policy still has a significant impact on the trend of copper prices. The US dollar index and US bond yields showed signs of peaking and falling in early November, supporting the momentum behind the high level operation of the US dollar index and US bond yields – the core CPI also showed a sustained weakening trend. The excess savings of current US residents are about to be depleted in the fourth quarter, and the tightening financial environment will gradually affect the judgment of residents on their balance sheets, showing signs of weakening the suppression of copper prices.

Supply side: On the mining side, the demand for smelters has increased month on month, with fewer maintenance companies, and most refineries are in the process of increasing production. Marginal increase in demand for copper concentrate in the next 1-2 months. On the supply side, due to the strike by workers in late October, some of the copper produced by Canon and Lomo in Congo is at risk of being stranded. In terms of refined copper, the domestic refined copper production in September was 1.012 million tons. Currently, the production rate of smelters is high, and manufacturers have a strong willingness to maintain full production. It is expected that the capacity utilization rate will remain high by the end of the year, and the production will continue to increase. Major global copper mines are facing production disruptions, exacerbating supply concerns and providing support for prices.

On the demand side: Last week, the operating rate of precision copper rods was 74.02%, a decrease of 3.81 percentage points compared to the previous week; The operating rate of recycled copper poles is 45.66%, with a weekly increase of 2.78 percentage points. With the arrival of the off-season for consumption, downstream consumption tends to be weak. The completion of domestic power grid investment has rebounded.

In summary, terminal demand was supported by the resilience of cable and new energy consumption at the end of the year, and overall performance remained stable, making up for some of the drag brought by off-season consumption. The appreciation of the Chinese yuan against the US dollar has improved the outlook for metal demand, and some funds have gone long before China’s new round of real estate stimulus measures, which has also supported copper prices. Adequate domestic copper supply suppresses copper prices. It is expected that copper will continue to fluctuate in the short term.