SunSirs: Copper Prices Slightly Decreased This Week (September 4-8)

Price trend

As shown in the above figure, copper prices have slightly declined this week. As of the end of this week, the spot copper quotation was 69,203.33 RMB/ton, a decrease of 1.56% from the 70,303.33 RMB/ton at the beginning of the week and an increase of 11.81% year-on-year.

According to the weekly rise and fall chart of SunSirs, copper prices had fallen for 5 weeks and risen for 7 weeks in the past three months, but it still slightly declined recently.

Analysis review

Since July, copper inventories in London had continued to increase recently.

Macroscopically, the US employment data had strengthened the Federal Reserve's expectation of maintaining high interest rates for a longer period of time. The satellite monitoring data of metal processing plants released on Tuesday showed that global copper smelting activity remained basically flat in August. The rebound in activity in China, a major producer of refined copper, was offset by weak data from other regions. In August, the institution's global diversification index fell to 46.7 from 46.8 in July, but China's smelting activity rebounded from 44.8 in July to 48.1 in August.

Supply side: With the opening of the domestic import window, a large amount of imported copper flooded into the spot market, making the spot supply more relaxed. Entering September, five smelters had maintenance plans, but the actual impact was not significant. There were new smelters in East China that were expected to be put into operation, and the domestic electrolytic copper production is expected to be 986,100 tons in September.

On the demand side: Power grid orders were available, air conditioning was entering the off-season, real estate completion data was shining, and electronic demand was slowly recovering. The traditional peak season of Gold September and Silver October had arrived, and consumption was resilient. The decline in copper prices had boosted downstream purchasing enthusiasm.

Market outlook

In summary, global economic growth slowed down and demand for electronic products decreased. The supply was sufficient, while demand was relatively weak. London copper inventory continued to grow, and the support for copper prices was continuously decreasing. It is expected that copper prices will show a correction from high levels and consolidation in the short term, and mainly continue to be weaker.

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