SunSirs: With Demand in a Low Season, the Copper Market Cooled Down

Price trend

According to data monitored by SunSirs, copper prices fluctuated last week, initially falling before rising. As of the 23rd, the price of copper was 100,920 RMB/ton, a decrease of 0.22% compared to the beginning of the week, but a year-on-year increase of 34.66%.

According to the weekly price fluctuation chart from SunSirs, copper prices have fallen for 6 weeks and risen for 6 weeks over the past three months, with a slight decrease last week.

LME copper inventories

According to data released by the London Metal Exchange (LME), LME copper inventories rose sharply, reaching 168,250 tons by the end of the week, an increase of 17.18% compared to the beginning of the week.

Macroeconomic factors: The ongoing debate surrounding the Federal Reserve's independence and the rebound and strengthening of the U.S. dollar index continued to put some pressure on the metals market, weighing on copper prices.

Supply side: BHP Billiton raised its copper production guidance, indicating potential for increased supply. Copper inventories in both London and Shanghai continue to rise, with Shanghai Futures Exchange copper inventories reaching a 9-month high, reflecting weak purchasing interest from physical buyers at high copper prices. However, coordinated production cuts and shutdowns in major mining areas in South America, as well as domestic capacity adjustments due to cost issues, continued to tighten raw material supply.

Demand Side: The demand side presented a mixed picture of contrasting trends. The transition to new energy and AI infrastructure were like two torches, driving growth in copper consumption. Electric vehicles and data centers had a higher demand for copper than traditional sectors. With the continued growth in global new energy vehicle sales and the accelerated development of AI data centers, the demand for copper in these related fields is constantly increasing, like a promising oasis. However, traditional sectors such as real estate investment are experiencing a significant decline, like a parched land, dragging down overall demand and resulting in an unbalanced development on the demand side.

Market outlook

In summary: From a global market perspective, the supply of copper is generally tight. However, domestic industrial buyers are adopting a wait-and-see approach due to high copper prices, and the deepening off-season is accelerating inventory accumulation, putting downward pressure on premiums and resulting in a sluggish market trading atmosphere. During the period leading up to the Chinese New Year, a cautious attitude towards copper price trends is advisable, and copper is expected to continue fluctuating within a high price range.

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