Price trend

According to monitoring data from SunSirs, copper prices showed an "N" shaped trend in June. At the beginning of the month, the copper price was 78,286.67 RMB/ton, and at the end of the month, the copper price rose to 78,886.67 RMB/ton, with an overall increase of 0.77% and a year-on-year increase of 1.96%.

Analysis review

According to the SunSirs' current chart, copper spot prices in June are mostly higher than futures prices, with the main contract being the expected price two months later, and the expected future price may be under pressure.

According to LME inventory, LME copper inventory continues to decline significantly in June. As of the end of the month, LME copper inventory was 93,475 tons, a decrease of 37.63% from the beginning of the month.

Macroscopically, Powell emphasized in his congressional testimony on June 24th that "there is still uncertainty about the sustainability of inflation," dampening the market's optimistic expectations for a rate cut in July. However, officials such as Bauman and Waller's dovish statements still supported the probability of a rate cut remaining around 60%. The easing of the situation in the Middle East (ceasefire in Iran) and the EU's countermeasures against US tariffs have formed a hedge, the risk premium in the Strait of Hormuz has subsided, and the sharp drop in crude oil prices has dragged down overall metal sentiment. Domestically, stable growth policies continue to be implemented (such as car trade ins and equipment upgrades), but the improvement in terminal demand is concentrated in a few sectors such as automobiles and home appliances, while sectors such as construction and photovoltaics remain weak, resulting in a "structural differentiation" of policy effects.

Supply side: Global copper concentrate spot processing fees (TC) remain low, reflecting a shortage in the mining sector. The Kamoa Kakula copper mine in the Democratic Republic of Congo has suspended some production due to floods, and the transportation volume from Chile and Peru has decreased significantly compared to the previous period, further exacerbating supply pressure. Although Chinese smelters are facing losses in processing fees, the export volume of refined copper fell in May, indicating limited capacity release and unresolved supply side contradictions.

Downstream: The copper consumption for new energy vehicles is expected to increase by 25% year-on-year, and the demand for copper in data centers may increase sixfold, providing long-term support for copper prices. But traditional demand areas are showing signs of fatigue: automobiles, the United States plans to impose tariffs on imported cars, directly impacting demand; Home appliances, the peak season for domestic sales in China fell short of expectations, and export orders were constrained by weak overseas demand; The bidding pace of the power grid is slow, and the release of demand is lagging behind.

According to the annual price comparison chart of SunSirs, in the past five years, copper prices have fallen more or risen less in July, and the decline in copper prices in July this year is a highly probable event.

Market outlook

In summary, in the short term, the shortage and low inventory in the mining sector may provide support for copper prices, but the weakness of traditional sectors in the demand side and the threat of tariffs may mainly cause fluctuations in copper prices.

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