Analysis of copper price trend in Yangtze River spot market (12.12-12.16)

Macro: Domestically, recently, China's CPI and PPI rose more than expected in November, indicating that the economy is stabilizing, but the Chinese authorities have taken measures to limit speculative activities, making some investors cautious, the Shanghai index fell sharply during the week, causing investors to take profits, spot copper followed suit, and reported a low level this week on Wednesday
.
Abroad, the US dollar soared sharply to a nearly 14-year high
as the Fed announced a 25 basis point rate hike in the early hours of Thursday morning in line with market expectations and hinted that it would accelerate the pace of interest rate hikes next year.
The sharp rise in the US dollar weighed on the performance of the copper market, and the overall performance of copper in this cycle was weak, and spot copper followed its trend
.

Market: Shanghai copper fell slightly this week and turned into volatility, and spot copper prices also fell
.
Compared with last week, the supply of flat water copper this week has increased significantly, and good copper is more scarce
.
Due to the delivery of the Shanghai copper 1612 contract and this Thursday, the basis of the Shanghai copper next month has been large in the first few days of this week, basically above 200 yuan / ton, attracting many speculators to enter
the market.
Therefore, although the actual downstream demand realization this week is weak, the market activity is acceptable
.
However, after speculators entered the market, the supply of good copper became more and more scarce, and the premium of good copper continued to rise, and the price of flat copper continued to increase
.
On Thursday, on the last trading day of the Shanghai copper 1612 contract, holders began to quote the Shanghai copper 1701 contract, and good copper turned into discount quotation, but failed to stimulate downstream market buying
.
Downstream demand is still weak, and downstream procurement is obviously more cautious under the influence of factors at the end of the year, and market demand is expected to get worse and worse
in the coming weeks.

In terms of stocks: as of December 16, LME copper stocks reported 307075 tons, a sharp increase of 11,775 tons per day, a sharp increase for five consecutive days, much higher than the average inventory value of 230,000 tons during the year, and the high point of inventory during the year was 379175 tons; As of December 16, Shanghai copper inventories in the previous period reported 144026 tons, a weekly increase of 12,076, the first increase in three weeks, indicating that short-term domestic inventory pressure has increased
.
Domestic and foreign copper inventories rose sharply this week, with London futures copper inventories surging nearly 44% in a week, and a sharp increase in inventories in the short term has rekindled concerns about the global demand outlook, and the copper price rebound lacks fundamental support, and the later trend remains to be seen
.

Aftermarket analysis: Recently, the Fed's interest rate hike and Yellen's hawkish statement are expected to boost the dollar index further higher, short-term base metals will come under pressure, and copper prices will continue to come under pressure
.
Next week is close to Christmas, European and American markets generally closed early, some investors or leave the market for the holiday, trading volume will gradually fade, it is expected that the next cycle copper is weak consolidation, spot copper or slightly lower
.
FYI
.