Recently, the copper price has been trading in a narrow range, continuing the overall high-level fluctuation pattern. The worry about the trade war initiated by the United States and the rising expectation of interest rate cuts by the Fed have provided some support for copper prices.

The expectation of interest rate cuts has increased. Pay attention to the inflation guidance.

Recently, the performance of the US macroeconomic data has been lackluster. The US July ISM Manufacturing Index was 48, below the expected 49.5. Also, the ISM Manufacturing PMI has been below the threshold line for 5 consecutive months, indicating that the US manufacturing industry has been continuously contracting. The US Bureau of Labor Statistics announced that the US July non-farm employment increased by 73,000, the lowest figure in nearly 9 months, far below the expected 104,000. The US May non-farm employment increase was revised down by 125,000, from the original 144,000 to 11,900; the June employment increase was revised down by 133,000, from 147,000 to 14,400. After this revision, the US May and June employment increases were reduced by 258,000. Due to the impact of the US employment data, the market has significantly increased the expectation of the Fed's interest rate cut in September. In addition, the US Bureau of Labor Statistics data shows that the US July CPI increased by 2.7% year-on-year, below the expected growth of 2.8%. The market's concern about the tariffs driving inflation sharply has not yet appeared. The US July core CPI increased by 0.3% month-on-month, although the core inflation rate has risen to the highest level since February, the market still strengthens the expectation of interest rate cuts in September.

The trade war initiated by the United States has also cooled down recently. On August 11, the President of the United States officially signed an executive order, extending the pause period for the 24% tariff on Chinese goods for 90 days, until November 10. At almost the same time, the State Council Tariff Commission of China announced a symmetrical pause on the 24% tariff on the United States. Thus, the market's concern about the trade war initiated by the United States has significantly slowed down.

At present, the market generally expects that the Fed will cut interest rates for the first time this year in September. However, it is still necessary to closely monitor the impact of the US inflation data on the Fed's subsequent monetary policy path expectations, and the financial attributes of copper prices are expected to continue to improve.

The copper tariff has been implemented, and the maintenance of the smelting plant is coming.

The processing fee for imported copper concentrate continues to trade in the negative range. Recently, although the tight supply situation of ore still prevails, and there is some operational interference in regions such as Chile, the processing fee for imported copper concentrate has not further weakened, and as of the week of August 29th, the processing fee for imported copper concentrate was -41.48 USD/ton.

In terms of waste copper, the domestic refined-waste price spread has been fluctuating upward. From the perspective of the structure of the refined-waste price spread, there has been no substantive change in the supply pattern of waste copper, and the structure of the refined-waste price spread is dominated by the futures copper contract price. Currently, the supply of waste copper is generally tight, and the turnover days of waste purple copper and waste yellow copper are both at a relatively low level overall. Affected by the maintenance plans of domestic smelters, demand may experience a short-term decline, and the tension in the supply of waste copper may be somewhat alleviated.

The US tariff policy on the copper industry chain has been implemented. Starting from August 1st, the US has imposed a 50% tariff on all imported semi-finished copper products and copper-intensive derived products. Copper input materials, such as copper ore, concentrate, smelting copper, cathode copper, and anode copper, are not subject to the "232 clause" or equivalent tariffs. After the clarity of the copper tariff policy, the market had concerns about the global inventory change outlook. Recently, the LME copper inventory has been accumulating at a faster rate than before, and the copper inventory of the domestic exchange has also increased to some extent, but it is difficult to form a reverse arbitrage opportunity in the short term, and the inventory structure of the global exchange will continue to be in its current state.

According to the survey, in the second half of the year, domestic smelters will once again enter a peak maintenance period from September to November, and the maintenance impact will gradually become apparent, affecting the inventory accumulation progress in the non-US and non-EU regions.

Seasonality is obvious, and consumption is expected to rebound

Currently, the characteristics of the off-season in the wire and cable industry are quite obvious, and the purchasing and sales progress of enterprises is relatively slow. According to the survey, at present, the overall order performance of the copper wire and cable industry is flat, the orders of the State Grid and the automobile industry remain relatively stable, and the orders of other industries are weak.

The air conditioning industry is the terminal demand port with the most obvious seasonal characteristics. The report shows that in August, the total production schedule of air conditioners, refrigerators, and washing machines was 26.97 million units, a 4.9% decrease from the same period last year. Breaking down the products, in August, the production schedule of household air conditioners was 11.443 million units, a 2.8% decrease from the same period last year.

Data from the China Association of Automobile Manufacturers shows that from January to July, China's car production increased by 12.7% year-on-year to 18.235 million units; car sales increased by 12% year-on-year to 18.269 million units. Among them, the production of new energy vehicles increased by 39.2% year-on-year to 8.232 million units; the sales of new energy vehicles increased by 38.5% year-on-year to 8.22 million units, and the sales of new energy vehicles accounted for 45% of the total sales of cars.

Terminal demand is expected to see a recovery process in the short term, and the recovery of the wire and cable industry's production and sales is expected to drive some terminal consumption. In terms of automobiles, on August 12, the Ministry of Finance, together with the Ministry of Commerce, the People's Bank of China, and the Financial Supervision and Administration Bureau, issued the "Implementation Plan for the Fiscal Subsidy Policy for Personal Consumption Loans". Consumers can enjoy fiscal subsidies for their consumption loans in the fields of automobiles and others within one year from September this year. In addition, the Ministry of Finance has allocated 69 billion RMB of the third batch of special long-term national debt funds, and the remaining funds will be allocated in October to support the consumer goods exchange work in various places. At present, the automobile industry is in the peak season of production and sales, and the production and sales of the automobile industry are expected to continue to accelerate in September.

In summary, in September, copper prices are expected to see a period of fluctuating strength.

As an integrated internet platform providing benchmark prices; On September 15th, the benchmark price of copper by SunSirs was 80,945.00 RMB per ton, an increase of 1.94% compared with the beginning of this month (79,401.67 RMB per ton).

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