The ups and downs of the epidemic last week weakened risk appetite, the Federal Reserve accelerated its reduction in debt purchase expectations, and market worries became stronger; the domestic central bank’s RRR cut and the marginal improvement in financial data in November boosted copper prices in the short term, but with the off-season In-depth, terminal demand marginally weakened, superimposed spot premiums continued to decline, and copper prices fluctuated weakly during the week.
Macroscopically, the variation of Omi Keron still needs to be observed, but the impact of the epidemic on the market will continue for a long time. Coupled with the Fed’s turn to the Eagle and the mixed data from the United States, the US dollar index will remain strong. Considering that there is only one week before the Christmas holiday in foreign countries next week, it is expected that some funds will be withdrawn from the market ahead of time. European and American stock markets will show certain pressure. Macro factors may put pressure on non-ferrous metals including copper.
In terms of inventory, the Shanghai copper stock holdings continued to decline last week. Last week, London's copper stocks rebounded from a low level, with a cumulative increase of 3,700 metric tons to 77,925 metric tons, a cumulative increase of 4.98%. However, compared with December 20, Lun's copper stocks are at a historically low level. London's copper stocks continue to fall, and are currently less than 80,000 tons. Under such circumstances, it is expected that there is still little room for the spot premium to fall back. However, in terms of absolute prices, as time goes by, the supply gradually rebounds, and the market will gradually turn to easing. Although the price is still difficult to break the shock range in the short term, the balance is tilting in the direction that is beneficial to the shorts.
In terms of fundamentals, the upstream copper ore imports increased significantly in the fourth quarter, copper ore inventories continued to increase, and copper ore supplies were relatively abundant. However, the tight supply of cold materials still remained, the superimposed sulfuric acid prices fell sharply, and the pressure on refinery production remained high. There was a rush to deliver. In November, the domestic power restriction was relaxed, and the operating rate of downstream processing enterprises has rebounded significantly. However, the low demand in the end of the year is approaching, and the downstream purchase willingness is low, and the sensitivity to the rise of copper prices is relatively high.
The copper price rebounded after fluctuating at a high level during the week. The price was still around 70,000. There was not much bad news in the overall market. Long and short interweaving is still the main tone. However, due to the weakening of domestic consumption margins and strengthening, spot premiums declined. Even if there is a disturbance on the supply side, Copper inventory is at a low level, still showing a pattern of weak supply and demand. Now we are waiting for the market to choose the direction. It is recommended to wait and see.
