Analysis of copper price trend in the domestic spot market in May

Macro: Domestically, China's economic data released this month was slightly sluggish, including a comprehensive slowdown in manufacturing data indicators in April, while the economic downturn dragged down the property market, statistics show that the year-on-year increase in new commercial housing prices in first- and second-tier cities across the country in April all fell
.
The tightening pace of China's manufacturing expansion signaled weakness in its industrial metal demand, and copper prices came under pressure and lacked
upside.
Abroad, with the continuous fermentation of the "leak door" incident, the American people have begun to question Trump's ability to govern, coupled with the few political achievements since taking office, the domestic call for his impeachment is getting higher
and higher.
According to data from investigative institutions, the risk of Trump's impeachment has soared by 50%, the political turmoil in the United States has soared market risk aversion, commodity prices have been under overall pressure since this month, and futures copper prices have been weak
.

Market: Spot copper prices fell first and then rose this month, and overall performance was weak
.
Since the profit window for imported copper this year has been closed for a long time, there are actually not many domestic imported copper sources this year, as can be seen
from the April refined copper import data released by customs that fell by 40% year-on-year.
The reduction in imported copper sources has made the supply side of the domestic market slightly tight, so this week's willingness of holders to hold up prices and shipments is stronger, and spot copper discounts have not fallen sharply
.
As the market fear is still strong, the downstream sentiment is still cautious, although there are merchants entering the market to stock up before the holiday, but it is also maintained on demand, and a large number of replenishment of inventory is relatively limited
.
In addition, under the influence of low spot copper discount and month-end capital factors, traders are also cautious in entering the market, and the overall market at the end of the month shows a posture of supply and demand
.
With the end of May, it is expected that the market demand side will still be difficult to improve in June, and this supply-demand stalemate may continue for some time
.

In terms of inventory: London copper stocks rose this month, with a cumulative increase of 64,975 metric tons per month to 318,650 metric tons, a cumulative increase of 25.
62%.

In the last week of this month, Shanghai copper stocks fell by 30,776 tons to 198585 tons, a decrease of about 13.
42%.

Recently, the Freeport India Grasberg copper miners announced that they will extend the planned strike time by a month until June 30, the news once again triggered supply concerns, copper prices are expected to be supported, but high copper stocks show that supply is still sufficient, the positive factor is expected to boost copper prices shortly
.
At the end of the month, during the small holiday of the domestic Dragon Boat Festival, domestic investors mostly choose to leave the market and wait and see, and only three working days will be traded next week, and the market hopes to replenish after the holiday to drive demand
.

Future market analysis: At present, the US political risk still exists, the market risk aversion has not completely cooled, coupled with the latest release of the US real GDP in the first quarter is still relatively weak, the market is pessimistic about the GDP of the United States in the next few quarters, the attractiveness of the US dollar to investors continues to decline, which makes the Fed have to be cautious in the process of promoting interest rate hikes, and the US dollar index is under pressure
in the short term.
In summary, boosted by the weakening of the US index and the news of the strike, the enthusiasm of downstream procurement after the Dragon Boat Festival may be improved, and demand drives prices, and copper prices are expected to rebound
slightly in June.