Price trend

As shown in the figure above, copper prices fell first and then rose this week. As of the end of this week, the spot copper price was 68,686.67 RMB/ton, up 3.72% from 66,220 RMB/ton at the beginning of the week and down 4.96% year on year.

Analysis review

According to the weekly rise and fall chart of SunSirs, in the past three months, the copper price has risen by 7 weeks and fallen by 5 weeks. Recently, the copper price has rebounded slightly.

Macroscopically: US CPI growth slowed for three consecutive months in December, but the growth rate was not lower than expected as in the previous two months. The Federal Reserve's 2023 vote committee Hack said that he supported the interest rate increase by 25 basis points. China's CPI increased by 1.8% year-on-year in December, while PPI decreased by 0.7% year-on-year. In 2022, China's CPI rose by 2.0%, PPI rose by 4.1%, and the purchase price of industrial producers rose by 6.1%.

Supply side: recent mine side disturbances occurred, mainly in the Cobre Panama mine of First Quantum in Panama. According to ICSG data, the annual capacity of Cobre Panama is 350 thousand tons, accounting for 1.9% of the global capacity. The protests in Peru were still continuing, and the two large mines, Las Bambas of Minmetals Resources and Cerro Verde of Freeport, would be affected. The short-term tc price remained high, and the domestic refined copper output in November 2022 was 986,000 tons, up 12.4% year on year. The import of copper sand, refined copper and copper products maintained year-on-year growth in November, while the Shanghai-Lun ratio fell, and the import of materials in December and after fell.

Demand side: the operating rate of refined copper rod dropped another 3.9 percentage points last week. Near the Spring Festival holiday, affected by the epidemic situation and the off-season of consumption, many small and medium-sized cable enterprises in the downstream had started the closing preparations before the holiday this week, while the pre-holiday stock of the enameled wire port was not much, the demand for refined copper rods in the downstream continued to decline, the production pace of copper rod enterprises slowed down, and the operating rate fell simultaneously.

Market outlook

To sum up, the atmosphere of the Spring Festival is becoming more and more intense, and many traders have finished their holidays in succession. US inflation data is positive for copper prices, but the reality of weak demand will limit growth. It is expected that copper prices will mainly fluctuate in a short term.

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