Price trend:

As shown in the chart above, copper prices fell initially and then rose last week. By the end of the week, spot copper was quoted at 86,046.67 RMB/ton, down 1.03% from the beginning of the week (86,941.67 RMB/ton), up 16.55% from the beginning of the year, and up 12.71% year-on-year.

According to data from SunSirs, copper prices have fallen for five weeks and risen for seven weeks in the past three months, with a slight decline last week.

LME copper inventory

According to data released by the London Metal Exchange (LME), LME copper inventories rose slightly, reaching 134,475 tons by the end of the week, a 0.65% increase from the beginning of the week.

Market Analysis

Macroeconomic factors: Federal Reserve officials generally held a cautiously hawkish stance on a year-end rate cut. As the widespread adoption of artificial intelligence drove industry reshaping, US companies laid off a total of 153,000 employees in October, fueling concerns about a potential shallow recession in the US economy, thus putting pressure on copper prices. Overnight, all three major US stock indices plummeted, with the Nasdaq falling over 2% at one point and the S&P 500 falling over 1%. Large-cap tech stocks collectively declined, with Nvidia and Tesla falling over 3%. AI-related stocks collapsed across the board, with Duolingo, an AI application stock, experiencing a sharp drop of over 25%. Market aversion spread, dragging down the demand outlook for the metals market.

On the supply side: Production was limited in some mines in Indonesia, Chile, and Peru, and the resumption of production at overseas mines that were disrupted is slow, leading to a month-on-month decline in domestic electrolytic copper production. Overall, copper supply is tight.

On the demand side: China's October manufacturing PMI fell short of expectations, revealing sluggish industrial activity. Copper prices remained high, and demand was gradually transitioning to the off-season. As of the beginning of the week, domestic refined copper inventories continued to accumulate, indicating strong downstream reluctance to accept high prices and a lack of interest in premium-priced goods, dragging down transactions. Actual consumption remained weak, limiting copper price increases.

Market outlook

In summary: As of November 7, bullish and bearish factors were intertwined, and the overall supply and demand fundamentals were in tight balance. In the short term, copper prices will consolidate at high levels, with tight supply and weak demand counterbalancing each other, making it difficult for copper prices to rise or fall.

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