SunSirs: Copper Prices Fluctuated Narrowly This Week (July 31- August 4)

Price trend

As shown in the above figure, copper prices fluctuated in a narrow range this week. As of the end of this week, the spot copper quotation was 69,900 RMB/ton, an increase of 0.09% from the 69,835 RMB/ton at the beginning of the week and a year-on-year increase of 16.43%.

According to the weekly rise and fall chart of SunSirs, copper prices had fallen for 4 weeks and risen for 8 weeks in the past three months, with fluctuations in copper prices recently.

Analysis review

Macroscopically, the US ISM manufacturing PMI recorded 46.4% in July, slightly lower than expected and shrinking for nine consecutive months; Manufacturing activity in the eurozone experienced its fastest contraction since May 2020 in July. The recent PMI data released in Asia showed that manufacturing activity in China, Japan, and South Korea remained weak, suppressing the outlook for metal demand. Recently, there were frequent positive policies in China, but the bullish sentiment had basically materialized, making it difficult for market confidence to further rebound before more positive policies being announced.

Supply side: The mining side maintained abundant resources. In July, 7 refineries had maintenance plans, with a total impact of about 60,000 tons. It is expected that the domestic electrolytic copper production in July will be 902100 tons, a decrease of 15,800 tons compared to the previous month. In August, there is only one refinery undergoing maintenance, and the domestic supply of electrolytic copper will increase month on month. Recently, there was not much inflow of imported resources, but overall, the long-term resources of Lomo and Russian copper will supplement domestic spot goods.

On the demand side: In the traditional off-season of consumption, although the terminal demand was not strong, it still had resilience. Last week, the operating rate of refined copper rods was 59.73%, a decrease of 10.14 percentage points compared to the previous week; the operating rate of recycled copper rods was 40.20%, with a decrease of 2.93 percentage points on a weekly basis. From a terminal perspective, the new field of wind and solar energy was improving, real estate completion and peak season air conditioning demand were resilient, while other traditional demand margins were weakening.

Market outlook

In summary, there were not many short-term smelter shipments and imported goods resources in China, supply and demand was tightly balanced, inventory was low, and downstream bargain hunting. It is expected that copper prices will continue to maintain an volatile trend overall.

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