1、 Trend analysis

As shown in the figure above, the copper price fluctuated and fell this week. As of the end of this week, the spot copper price was 69021.67 yuan/ton, down 0.38% from 69285 yuan/ton at the beginning of the week, down 4.14% year on year.

Copper weekly rise and fall chart

According to the weekly rise and fall chart of the Business News Agency, in the past three months, the price of copper rose by 7% and fell by 4%, and there was a slight correction after the recent slight rebound.

LME copper inventory

Macroscopic aspect: In his testimony to Congress this week, Jerome Powell, the chairman of the Federal Reserve, said that the Federal Reserve may speed up the pace of interest rate increase and raise the interest rate to a higher level than previously expected, which has heightened people’s concerns about economic activity and global industrial metal demand. China’s CPI fell in February, with a year-on-year increase of 1%, 1.1 percentage points lower than the previous month, and 0.5% lower than the previous month; The production recovery of industrial enterprises accelerated, the market demand improved, and the PPI was flat on a month-on-month basis, with a year-on-year decrease of 1.4%. The year-on-year decrease was 0.6 percentage points higher than that of the previous month.

Supply side: China’s refined copper output in February was 907800 tons, up 6.5% year-on-year, slightly higher than the expected 900000 tons. The electrolytic copper output in March may continue to exceed expectations, and the interference at the South American mining end is slightly slow. Many long-awaited projects will reach production in 2023-2024, including those in Peru, Chile, Central Africa and Mongolia. It is estimated that by the end of 2024, the copper supply will increase by about 12% from that of 2021. Not only will the supply of primary copper ore increase, but also the supply of scrap copper is expected to increase.

On the demand side: the operating rate of refined copper rod was 62.1%, and the circumferential ratio rose by 3.5 percentage points; The operating rate of regenerated copper rod was 58.52%, and the circumferential ratio decreased by 1.8 percentage points. The price difference of refined waste is around 1700 yuan/ton, and the substitution of recycled copper for refined copper consumption is enhanced. In terms of terminals, processing and downstream enterprises gradually resumed production, and orders for wires and cables and enameled wires increased.

To sum up, the short-term macro market suppresses the copper price, and the supply has increased. However, the domestic market has entered the seasonal consumption season, and the demand is expected to increase. In the case of both supply and demand, the copper price is expected to remain high and volatile in the short term.