The hottest supply is abundant, and the upward res

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The upward resistance of copper price with abundant supply has increased

the rebound of copper market has not lasted for long, and recently it has entered the adjustment pattern again. In the medium term, the pull effect of downstream consumption is gradually weakening, the pressure on the supply side is becoming increasingly prominent, the US dollar index rebounds strongly, and there are occasional geopolitical risk events. The upward resistance of copper prices is significant, and the probability of oscillation and fall is high

The data released by Chile's national copper Commission (cochilco) showed that the country's copper output in the first quarter of this year was 1.42 million tons, a significant increase of 18.9% over the same period last year; Copper output in March was 487900 tons, a year-on-year increase of 30.8%. According to SMM research data, 201 China's plastic machinery enterprise market will be more open up. In April, China's refined copper output was 737800 tons, an increase of 3.42% month on month and 14.2% year on year; The cumulative output from January to April was 2.8563 million tons, an increase of 11.9% year on year. According to the latest monthly report of ICSG, the global refined copper supply was in excess of 33000 tons in January 2018 and 14000 tons in December last year; China's bonded copper inventory in January was 28000 tons of excess, compared with a shortage of 11000 tons in December last year, and the oversupply situation intensified

although the tc/rc of smelters is declining, suggesting that the supply of upstream copper mines is tightening, from the above data, the supply of refined copper is abundant, especially in China. Since 2015, domestic refined copper production has been increasing, and this trend may be difficult to change in the medium and short term. In addition, in the big year of copper mine salary negotiation in Chile, the expectation of supply interference may fail

demand pulling effect weakened

from the perspective of economic leading indicators, the euro zone manufacturing PMI and the U.S. manufacturing PMI fell from high levels in March and April, suggesting weak growth in the two major economies. China's manufacturing PMI also fell slightly in April, down 0.1 percentage points month on month. From the sub index, the new order index was 52.9%, down 0.4 percentage points from the previous month, indicating that the growth rate of manufacturing market demand has slowed down; The raw material inventory index was 49.5%, down 0.1 percentage points from the previous month, lower than the critical point, indicating that the inventory of major raw materials in the manufacturing industry continued to decline. The fall of manufacturing PMI is easy to trigger pessimistic expectations of the market for the economy, which is detrimental to the consumption of copper. Judging from the low inventory of raw materials, the wait-and-see mood of downstream enterprises is strong, and the stock preparation is not active. The high rise of spot water only lasted for about three days at the end of April. With the end of gold, silver and silver, the pulling effect of the consumer end is also weakening

the US dollar index rebounded strongly

due to the rise in inflation expectations and interest rate hikes, the US dollar index has been active recently, breaking the 92 and 93 integer levels at one stroke, with a significant rise. Before the Federal Reserve's interest rate meeting in June, the dollar index will still be supported, which will suppress copper prices. On May 3 and 4, a delegation of U.S. economic and trade representatives, who are also an important source of sand dust in the northwest, came to China for negotiations, but no substantive progress was made. The market is concerned that the Chinese delegation will go to the United States for negotiations this week. Sino US trade frictions may recur, and we still need to be vigilant about their pressure on bulk commodities

according to the data released by CFTC, as of the week of May 1, the non-commercial short position of copper increased by 12807 hands, which is the largest one week increase in the past year and a half. The universal tensile testing machine (auto parts testing machine) is widely used in the industry. The Sino US trade war has affected the paper industry, and the raw material layout of the paper mill's core competitiveness, while the non-commercial long position increased by only 5087 hands. As of the week of May 8, copper non-commercial short positions continued to increase by 1656 hands, while non-commercial long positions only increased by 192 hands. This shows that the bearish sentiment in the market is fermenting, which hinders the rebound of copper prices

in addition, China imported 442000 tons of unwrought copper and copper products in April, a year-on-year increase of 47%; From January to April, imports totaled 1.67 million tons, an increase of 15.4% over the same period last year. The increase in imports implies a short-term boom in supply and demand, and the contraction of scrap copper imports indirectly promotes the consumption and import of refined copper

although the short-term copper price has rebounded demand driven by the sharp decline in LME copper inventory and the strength of crude oil, in the medium term, with the weakening of the pulling effect of consumption on copper price, the pressure of abundant supply, and the strong rebound of the US dollar index, the downward probability of copper price oscillation is greater

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