Analysis and forecast of domestic spot copper market in 2016

Trend review: In 2016, the copper price trend is basically divided into two stages, the first three quarters, the price is in the range of shock sorting, at the end of October, the price suddenly broke out, once rose about 30%.

In November, copper prices continued to soar, and domestic copper prices easily broke the upper edge of the shock of 39,000 yuan / ton, and the highest test was close to 50,000 yuan / ton
.

Market analysis: In the first three quarters, copper prices maintained range volatility, and the trend was greatly affected by the Fed's movements, domestic economic policies, and the stock market, in addition, market demand is still the main factor
restricting the rise of copper prices.
At the beginning of the year, due to the Federal Reserve's announcement of a pause in interest rate hikes, and crude oil rebounded sharply, copper prices rebounded slightly, after that, macro benefits continued to support copper prices, on the one hand, domestic supply-side reform expectations heated up, capacity reduction continued, on the other hand, the central bank lowered the RRR, monetary environment was loose.

Since late March, copper prices have been weak, mainly due to the market's fear that the Fed will accelerate the process of raising interest rates, funds fleeing wildly, copper prices have fallen in shocks, in addition, the domestic stock market has plunged, and the worries on the demand side of the copper market have rerisen, and the ensuing bearish pressure on copper prices has fallen
.
Since mid-April, copper prices have ushered in a wave of rebound
.
The Federal Reserve interest rate meeting announced that the US dollar interest rate was unchanged, while domestic economic data improved sharply, and the favorable macro environment made copper prices volatile.

Since May, copper prices have fallen again, and the weak market has continued until June, after which global macro risks gradually weakened, giving commodity easing environment, copper prices received some support, but weak demand is still a constraint, and prices can basically only maintain range-bound sorting
.

By the end of November, copper prices at home and abroad had risen by nearly 30% compared with the highest at the beginning of the year, reversing the downward trend
since 2011 。 This round of copper price rise, of course, China factors have contributed a lot, first of all, China's economic data is good, boosting the market's expectations of copper price trends; Secondly, the domestic inflation pressure is gradually reflected, and under the background of rising inflation, the financial attributes of copper metal will become more and more obvious, attracting the attention of speculative funds; Third, the change in the RMB exchange rate also made the price of Shanghai copper strong, and brought the price of London copper higher, which is the most important trigger for this round of rise
.

Summary: On the whole, the fundamentals have not yet benefited copper prices during the year, mainly because the financial attributes of copper are at play
.
However, industry insiders said that in the context of China's initial economic stability, copper supply and demand still maintain a surplus state, and it is difficult for Chinese factors to support the overall situation in this globally priced commodity for a long time, and this rise can only be identified as a temporary rise
.
The later trend of copper still depends on the RMB exchange rate and the results of the Fed's interest rate meeting, and on the whole, copper prices may maintain a high volatility trend, and the probability of a sharp rise or fall is small
.