SunSirs: This Week, Copper Prices Were Mainly Experiencing Weak Fluctuations (January 8-12)

Price trend

As shown in the above figure, copper prices rose first and then fell this week. As of the end of this week, the spot copper quotation was 68,358.33 RMB/ton, a decrease of 0.16% from the beginning of the week's 68,465 RMB/ton, and a year-on-year decrease of 0.21%, which was equivalent to the price of the same period last year.

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 a slight decline in recent times.

Analysis review

According to data released by the London Metal Exchange (LME), LME copper inventory had recently slightly declined, with 157,325 tons of LME copper inventory as of the weekend.

Macroscopically, the US CPI growth in December exceeded expectations and heated up, leading to a decrease in market expectations for the Federal Reserve's interest rate cuts in March and May, and a rebound in the US dollar index.

On the supply side, the spot processing fee TC for imported copper concentrate continued to decline, and the profits of smelters had narrowed to near breakeven. The disturbance in overseas copper mine supply was increasing, affecting the procurement of raw materials by Chinese smelting enterprises. The domestic supply of recycled copper was tight, and the import loss of recycled copper had turned into profit, but the price difference of refined waste had fallen and was near the breakeven point.

On the demand side, the overall operating rate of the copper industry in December was 71.08%, a decrease of 3.01% compared to the previous month and a decrease of 5.45% year-on-year. Terminal consumption had entered the off-season, but the willingness of enterprises to buy stocks at low prices still existed.

Market outlook

In summary, a large influx of imported copper had impacted domestic spot supply, resulting in weak downstream demand and increased pressure on expected inventory accumulation during the off-season. The upward momentum of copper prices lacked sustainability. In the short term, copper prices will maintain a weak and volatile trend.

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