Price trend

According to monitoring data from SunSirs, copper prices showed an "M" - shaped trend in July. At the beginning of the month, the copper price was 80,235 RMB/ton. At the end of the month, the copper price fell to 79,538.33 RMB/ton, with an overall decline of 0.87% and a year-on-year increase of 8.51%.

According to the chart of SunSirs, the spot price of copper in July was basically higher than the futures price, and the main contract is the expected price two months later. The expected future price may be under pressure.

Analysis review

According to LME inventory, LME copper inventory increased significantly in July. As of the end of the month, LME copper inventory was 124,775 tons, up 36.7% from the beginning of the month.

Macroscopically, in early July, the Trump administration announced the decision to impose a 50% tariff on imported copper starting from August 1st, which caused the copper market to rise first and then fall in July. The current focus is on the 50% metal import tariff that the US will implement next Friday. The tariff rate is very high and the implementation window is very short, especially for copper products, which has not yet been fully clarified, causing a severe shock in the global copper market.

Supply side: Overseas mining disturbances continued, and traders were accelerating their shipments to the US before August 1st, resulting in tight spot supply. Copper concentrate spot TC continued to fluctuate in the negative range.

Downstream: The overall operating rate of cable companies remained stable, and home appliance sales were boosted by national subsidy policies and 618 promotions (refrigerators and air conditioners had performed well). The high production and sales of new energy vehicles continued to drive copper demand. However, in the off-season of the industry, spot consumption was weak, and the off-season atmosphere on the demand side was deep, resulting in low actual purchasing sentiment downstream.

According to the annual price comparison chart of SunSirs, copper prices increased more and decreased less in August in the past five years, and there is uncertainty in copper prices in August this year due to the impact of tariffs.

Future outlook:

In summary, the tight supply situation in overseas mining had not changed, and domestic copper concentrate processing fees remained low. Coupled with the low social inventory of copper in Shanghai and active transactions in the spot market, the tight supply of goods and downstream replenishment at low prices had formed support. However, global macro uncertainty and policy turning points are approaching, and it is expected that copper prices will mainly fluctuate to be stronger.

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