1、 Trend analysis

As shown in the figure above, copper prices fell slightly this week. By the end of this week, spot copper had offered 66345 yuan/ton, down 1.97% from 67680 yuan/ton at the beginning of the week, down 5.79% year on year.

Copper weekly fluctuation chart

According to the weekly ups and downs chart of the business community, in the past three months, the price has risen by 6 or fallen by 5, even by 1. Recently, the copper price has recovered slightly after the early rise.

Macro aspect: the joint prevention and control mechanism of the State Council: resolutely oppose the two tendencies, and continue to rectify “layer by layer”; The “big hawk” of the Federal Reserve: further interest rate hikes are required to reach the “restrictive level”, at least 5% – 5.25%. So far, the impact of interest rate hikes on inflation is limited. Recently, the officials of the Federal Reserve made another hawkish statement that the Federal Reserve will further increase interest rates. The 50BP interest rate increase is also a significant increase in interest rates. Therefore, the decline of the dollar has slowed down, and copper prices are also under pressure.

Supply side: LME does not restrict the delivery of Russian metal, which also reduces the risk of market position squeeze. However, domestic and foreign inventories are still at a low level, and the inventory has increased slightly this week. At present, the overhaul of copper smelting enterprises in Fujian market in South China has been completed, and the output has gradually rebounded. However, although the epidemic interference in Henan, Xinjiang, Liaoning, Inner Mongolia and other places continued, it did not affect production, and the impact was more on the speed of transportation and delivery. Therefore, the short-term electrolytic copper output will continue to increase slightly.

Demand side: The copper price rises too fast in the short term, which also hurts downstream consumption, and it is difficult to support the copper price to continue to rise significantly.

Inventory: On November 17, copper in the previous period rose 9592 tons to 59025 tons from the beginning of the week. LME copper inventory rose 3125 tons to 80025 tons, up 3.6% from the beginning of the week.

To sum up, the current macro environment is neutral. After the overhaul, the domestic copper output has rebounded. Although the inventory has increased, it is still at a low level, supporting the copper price. The downstream demand is general, and the short-term copper price is expected to fall into a pattern of shock and weakness.