Price trend

As shown in the above figure, copper prices rose first and then fell last week. As of this weekend, the spot copper quotation was 78,933.33 RMB/ton, up 0.05% from 78,891.67 RMB/ton at the beginning of the week, up 6.91% from the beginning of the year, and down 0.56% year-on-year.

Analysis review

Copper weekly fluctuation chart

According to the weekly chart of SunSirs, copper prices had fallen for 3 weeks and risen for 8 weeks in the past three months, with a slight increase this week.

LME copper inventory

According to data released by the London Metal Exchange (LME). LME copper inventory slightly decreased, with 116,850 tons of LME copper inventory as of the weekend, down 22.04% from the beginning of the month.

On a macro level, the May CPI, PPI, and initial jobless claims data in the United States confirmed a slowdown in inflation, and the market was increasingly concern about the probability of the Federal Reserve cutting interest rates in September, with expectations of even two cuts within the year. But the sudden tension in the Middle East had boosted risk aversion, with the US dollar index hitting bottom and rebounding, coupled with a nationwide decline in the domestic stock market, the commodity market atmosphere had taken a sharp turn for the worse.

Supply side: The contradiction of copper mine shortage was still prominent, and the high growth of power grid investment supports the resilience of copper consumption. Overseas mining supply had not fully recovered, LME copper inventory continued to decline, and domestic spot market supply was tight, providing some bottom support for copper prices.

On the demand side: In June, domestic consumption gradually entered the off-season, coupled with the opening of the export window, smelters accelerated their export layout, and short-term supply and demand support for copper prices weakened marginally. Downstream, due to sustained high prices and a decline in terminal orders, the procurement pace continued to slow down, and some processing companies had begun to reduce their operating rates.

Market outlook

In summary, the overall fundamentals were stable, and the contradiction of copper mine shortage was still prominent. Demand slowed down during the off-season of consumption, but the high growth of power grid investment supported the resilience of copper consumption. It is expected that copper prices will continue to fluctuate.

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