Analysis of copper price trend in Yangtze River spot market (10.17-10.21)

Macro: The stronger performance of the US dollar index this week still put pressure on copper prices, the Federal Reserve's Beige Book on economic conditions believes that the US economy is moderately expanding, and the market's expectation of a December interest rate hike is still as high as 67.
6%, which supports the US dollar; The European Central Bank announced that interest rates were unchanged and hinted at extending asset purchases until March next year, allowing the dollar to borrow again to the upside, strengthening the dollar, and negative copper prices
.
Domestically, the depreciation of the renminbi after the National Day continues
.
The offshore yuan in Asia-Pacific quickly extended its losses after falling below the 6.
76 mark in early trading, updating a new low in more than six years at 6.
7637
.
The market believes that although the central price of the renminbi fell below 6.
7, the depreciation was relatively small
compared to the currencies of developed economies and other emerging economies.
Overall, the news surface is empty
.

Market: Market supply is tight this week, smelters ship a small amount, traders due to tight supply and weak enthusiasm for shipments, so the premium rose sharply, and continued to climb
after the change of month.
The market source is mainly domestic brands, imported copper due to the current Shanghai price is not suitable for import, so the market imported brands are few, downstream manufacturers due to high premium water and high copper prices mostly remain on the sidelines, a small amount of on-demand procurement
.
Market supply remained tight on Friday, with few shipments from domestic smelters and traders also purchasing more
due to insufficient supply and slightly less enthusiasm for shipments.
Under the premise of the current surge in premiums, and the new orders are limited, the current orders are stable, only a small number of on-demand purchases, most of them remain on the sidelines, and the situation of purchasing and stocking on weekends is also rare
.

Stocks: As of October 21, LME copper stocks reported 346775 tons, a weekly increase of 625 tons, much higher than the average inventory of 217,000 tons during the year, and the high point of inventory during the year was 379175 tons; as of October 21, the previous Shanghai copper inventory reported 117634 tons, a weekly decrease of 3,805 tons, far lower than the average inventory value of 229,000 tons during the year, indicating that the pressure on domestic stocks is much weaker than that of foreign countries
.
For copper price factors, inventory changes are one of
the important reasons for copper prices.
The change of LME inventory and the trend of domestic copper prices show a phased negative correlation, especially after 2010, LME copper stocks are rising, copper prices are generally weak
.
From the current LME inventory change analysis, showing an upward trend, which means that copper prices are difficult to rise in stages
.

Future market analysis: macro aspect, the domestic economy is running smoothly, there will be no major changes in policy, and the possibility of the Fed raising interest rates within the year increases, the US dollar index is more likely to strengthen, and the impact of interest rate hike expectations and RMB depreciation on copper prices cannot be ignored; In terms of the market, the upstream supply is sufficient, the downstream demand is insufficient, the inventory is at a high level, the fundamental bearish factors are intertwined, and the possibility of weakening copper prices in the future is greater
.
At present, copper prices are in decline, and began to test the support line of the shock range during the year, focusing on the performance
of copper prices near the support line.