SunSirs: The Overall Situation of Copper Prices Last Week was that they Fell first and then Rose.

Trend analysis

Last week, copper prices fell first and then rose. As of last weekend, the spot copper price was 78,818.3 RMB/ton, up 0.5% from 78,245 RMB/ton at the beginning of the week, up 6.76% from the beginning of the year, and down 3.86% year-on-year.

According to the weekly rise and fall chart of SunSirs, in the past three months, the copper price fell 4 and rose 8, and rose slightly last week.

According to data released by the London Metal Exchange (LME). LME copper stocks fell slightly. As of last weekend, LME copper stocks were 184,650 tons, down 6.6% from the beginning of the month.

Macro aspect: The US PPI and retail sales data in April were lower than expected, but the latest statement of the Federal Reserve Powell said that "long-term interest rates may remain high", suggesting that the time point for interest rate cuts this year may be postponed to September. Although the tariff negotiations between the two sides have made progress and the US tariffs on China have been reduced to 10%, the market is worried that policy repetitions may cause supply chain fluctuations.

The US dollar index remained near the 101 mark, and the financial premium of copper prices was limited. The differentiation of US stocks intensified, and the Nasdaq closed down 0.18%, reflecting the market's cautious attitude towards the valuation of growth stocks in a high-interest rate environment.

Supply side: The copper concentrate processing fee (TC) fell to -40 US dollars/dry ton, and the cash cost of the smelter for purchased ore rose to 72,000 RMB/ton, but the concentrated maintenance of smelters in the second quarter (involving 21,000 tons of production capacity) has not significantly affected the supply.

Domestic electrolytic copper production in April increased slightly by 0.32% month-on-month to 957,000 tons, and the release of new production capacity in May may drive production to continue to rise.

Demand side: The growth rate of power grid investment fell back to 8%, and the peak season for air-conditioning production drove the demand for copper pipes (the output in March increased by 11.9% year-on-year), but copper for construction fell by 12% year-on-year due to the drag of the real estate chain. The widening of the price gap between refined and scrap copper weakened the consumption of refined copper, and the industry side showed the characteristics of "tightening of the mining end, loose smelting, and differentiation of terminals".

In summary: China and the United States reached a 90-day tariff suspension agreement, and copper prices rose briefly, but the uncertainty of the trade agreement and the Fed's wait-and-see attitude towards interest rate cuts suppressed the outlook for metal demand, and copper prices gave up some of their gains. The spot market was generally traded, with holders holding prices and downstream purchases in a rigid demand. Although the TC of concentrates remained low, reflecting that the tight situation at the mine end continued to support copper prices, the approaching off-season and high copper prices may suppress demand. It is expected that copper prices will fluctuate widely in the short term this week.

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