SunSirs: Copper Prices Fell First and Then Rose (July 14-18)

Price trend

As shown in the above figure, copper prices first fell and then rose last week. As of last weekend, the spot copper price was 78,678.33 RMB/ton, an increase of 0.21% from the beginning of the week at 78,513.33 RMB/ton, an increase of 6.57% from the beginning of the year, and a year-on-year increase of 0.74%.

According to the weekly chart of SunSirs, copper prices have fallen for 3 weeks and risen for 8 weeks in the past three months, with a slight increase last week.

LME copper inventory

According to data released by the London Metal Exchange (LME). LME copper inventory slightly increased, with 122,150 tons of LME copper inventory as of the weekend, up 33.86% from the beginning of the month.

Macroscopically, retail sales in June increased by 0.6% month on month (exceeding expectations by 0.1% and the previous value of -0.9%), with core retail sales growing by 0.5%, indicating a moderate recovery in consumer spending; The number of initial jobless claims had dropped to 221,000 (a three-month low), while the number of renewed claims remained at a historical low of 1.956 million. The stable labor market supported consumer confidence.

Supply side: Overseas, Kazakhstan's refined copper production increased by 3.6% year-on-year from January to June; Global copper mine production increased by 190,000 tons (+5.1%) from January to April, with the restart of mines such as Kipushi and Antamina driving an increase of over 600,000 tons by 2025. The trend of loose supply at the mining end was clear. Domestically, refined copper production in June increased by 14% year-on-year, reaching a historic high; The recovery of profits at the smelting end (with processing fees rising to 3,600 RMB/ton) had driven the operating rate to 95%. Coupled with the addition of new production capacity in the second half of the year, the supply of copper concentrate is expected to further ease.

Demand side:

Strong infrastructure support: The demand for copper in electricity and public facilities was strong, and the special debt increased by 27.9% (1.9 trillion yuan) from January to May, continuing to boost.

Heavy drag from real estate: The decline in sales completion had narrowed, new construction was weak, and the proportion of copper used in real estate is expected to continue to decline.

The production and sales of automobiles and household appliances increased from January to May, but the growth rate slowed down in the second half of the year due to the rise in consumption; Home appliances have significantly slowed down since April (refrigerators had turned negative).

Future outlook:

In summary, after the implementation of tariff policies, the market focus shifted to fundamentals, while the accumulation of inventory during the off-season and the strong US dollar formed a double pressure. The fundamentals have turned loose, putting downward pressure on copper prices. It is expected that copper prices will experience weak fluctuations in the short term.

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