Analysis of copper price trend in Yangtze River spot market (1.3-1.6)

Macro aspect: Last week, countries released important economic data, and the overall performance was mixed
.
In China, the December 2016 manufacturing index performed gratifyingly, with the official manufacturing PMI remaining stable above the boom and bust line, and the Caixin manufacturing PMI also recording a good increase
.
In the United States, the manufacturing index also performed well, and the dollar edged higher
.
The dollar weakened
amid concerns that the Fed's December 2016 minutes were not hawkish enough and Fed officials were concerned about fiscal policy after Trump took office.
The US small non-farm payrolls data underperformed expectations and the previous reading, and the dollar continued to fall to a near half-month low
.
However, due to the good prospects of the US economy and interest rate hikes, the market is still bullish on the medium-term rally of the US dollar, so the negative impact
of the US dollar on copper prices cannot be ignored.

In terms of the market, this week is the first trading day in 17 years, merchants basically have no financial troubles, so the willingness of holders to ship has been greatly reduced, so the source of spot copper market this week has tightened compared with last week, and the spot copper discount has also narrowed, and good copper once reported a discount of 20 yuan
.
Shipment sentiment in the market smelters this week was poor, mainly from traders, so the market was mainly based on imported copper
.
Although the current loss of imported copper is still large, the renminbi has performed strongly this week, soaring more than 1,000 points on Thursday, reflecting the government's determination
to maintain the stability of the yuan.
Affected by this, copper prices have been weak inside and strong outside this week, so the loss of imported copper may be expected to narrow
in the future.
On the demand side, the Spring Festival is approaching, many downstream companies have been able to start the holiday, and market demand has deteriorated
significantly compared with last week.
In addition, although many merchants have a stocking plan, they are still bearish on copper prices before the year, so they are still on the
sidelines.
Overall, the deterioration of market demand this week is more obvious, and market transactions are mainly concentrated among
traders.

In terms of stocks: LME copper stocks reported 295125 tonnes in the week ended January 6, down 27,100 tonnes weekly, the 11th week in the past 13 weeks, but still well above the average inventory of 230,000 tonnes during the year, and the high of stocks during the year was 379175 tonnes; As of January 6, the previous Shanghai copper inventory reported 171561 tons, a weekly increase of 24,963 tons, a sharp climb for two consecutive weeks, and hit a new high since September 2 last year, indicating that short-term domestic inventory pressure has further increased
.
Overall, the spot market this week still showed weak supply and demand, some traders did not resume trading, still in the year-end settlement state, downstream manufacturers continue to maintain weak demand, holding a wait-and-see attitude, a small amount of on-demand purchase
.

Future market analysis: Although there are many macro heavy data in recent days, the overall performance is mixed, failing to give copper prices a clear direction, in the short term, due to the lack of consumption support, the strength and sustainability of the copper price rebound may not be good
.
In the medium and long term, due to the recovery of inflation expectations in overseas markets and the improvement of copper's own supply and demand pattern, the focus of copper price operation will shift
upward.