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Shanghai Copper Opened Lower and Rebounded, Copper Mine Supply Tightened

April 12 2021 08:48:01     Ruida Futures (Linda)

Internal and external trends: LME copper rebounded slightly on Thursday. As of 15:00 Beijing time, the three-month LME copper reported US$8980.5/ton, a daily increase of 0.57%. Shanghai Copper’s main 2105 contract opened low and rebounded, with the highest daily of 67210 yuan/ton, the lowest of 66310 yuan/ton, and the closing price of 66850 yuan/ton, down 0.07% from the closing price of the previous trading day; the trading volume was 120227 lots, an increase of 26051 lots per day; Hold positions 117460 hands, a daily decrease of 5864 hands. Basis -460 yuan/ton; Shanghai copper 2105-2106 monthly price difference -120 yuan/ton.

Market focus: (1) Minutes of the Fed's March meeting, the US economy is still far from achieving the goal of a longer cycle. Most Fed officials believe that inflation risks are generally balanced. (2) US President Biden: The infrastructure plan "will definitely" be adjusted. Do not allow to do nothing on infrastructure issues. (3) From January to February, Chile's national copper industry fell by 2.8% year-on-year to 882,700 tons; BHP Billiton's Esconidaos copper mine and Pelambres copper mines decreased by 14.9% and 11.8% respectively; while Chile's Codelco output increased by 10.7% to 264,800 tons. 

Spot analysis: On April 8th, spot 1# electrolytic copper was quoted at 66280-66500 yuan/ton, with an average price of 66390 yuan/ton, and a daily drop of 510 yuan/ton. Changjiang Nonferrous Metals reported that the holders delivered goods at high prices, and downstream purchases on demand, the overall transaction was acceptable.

Warehouse receipts inventory: On Thursday, Shanghai copper warehouse receipts totaled 115,089 tons, a daily decrease of 601 tons; on April 7, LME copper inventory was 150,325 tons, a daily increase of 6,900 tons.

Main positions: The top 20 long positions of Shanghai Copper's main 2105 contract were 71,813 hands, a daily decrease of 3954 hands, a short position of 80,392 hands, a daily decrease of 2324 hands, a net short position of 6579 hands, a daily increase of 1,630 hands, both long and short positions decreased, and the headroom increased.

Market research and judgment: Shanghai Copper 2105 opened lower and rebounded on April 8. The Fed promised to continue to provide monetary policy support until the US economic recovery is more stable, superimposed on the previous strong performance of employment data, market risk sentiment increased, and the US dollar index fell. The poor output of copper mines in upstream Chile at the beginning of the year, combined with the recent closure of the border due to the epidemic, the tightening of domestic copper mine supply, and the continuous downward adjustment of processing fees TC, put pressure on smelter production. In March, global copper smelting activities fell to the lowest level in at least five years. The current downstream demand is still weak, and domestic copper stocks have not yet entered a downward channel. However, there are still expectations for the peak season of domestic demand, and copper prices continue to adjust. Technically, the mainstream long positions of the Shanghai Copper 2105 contract have lightened up relatively large, focusing on the 40-day moving average support, and short-term shocks are expected to be strong. Operationally, it is recommended to do more on dips at 66,400 yuan/ton and stop loss at 66,000 yuan/ton.

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