Analysis of copper price trend in Yangtze River spot market (2.13-2.17)

Macro: At the beginning of the week, the news of the world's first and second largest copper mines successively strike and stop production continued to ferment, the copper market was boosted, copper prices fluctuated higher, however, copper prices beyond the upper band of Bollinger Road felt more overbought pressure, and the rally did not last
.
After that, under the guidance of Fed Chair Yellen's hawkish interest rate hike remarks and good inflation data, the dollar recorded a one-month high of 101.
76, and in the context of the dollar's bottoming rebound, copper with high financial attributes will be suppressed again, and copper prices will fluctuate and fall
.

Market: Spot copper market merchants gradually returned to the market this week, but affected by the sharp rise in copper prices, the market transaction this week is not obvious compared with last week
.
At the beginning of the week, copper prices remained stable at a high level after a sharp rise, and the shipment sentiment of holders increased sharply, but it was obviously difficult for the downstream to accept high prices, and only a very small number of low-inventory merchants entered the market to buy goods on demand, and the rest remained on the sidelines
.
Although the spot copper premium has been rising, the main reason is due to the approaching delivery period and the large basis of the next month rather than driven
by the improvement in downstream demand.
With the sharp correction of Shanghai copper, stimulating some downstream to enter the market to buy goods, the market transaction showed a short-term improvement, but with the completion of a new round of inventory replenishment downstream, the market transaction returned to light
again.
Copper prices continued to pull back in the last two days of this week, making the market bearish sentiment heated, so the downstream is more cautious and wait-and-see, although holders continue to reduce spot copper premium in order to seek transactions, but there are few responders and lack
of transactions.

Inventories: London copper inventories fell overall this week, with a cumulative weekly reduction of 19,125 metric tons to 229075 metric tons, a cumulative decline of 7.
7%, a low of more than two months
.
Although LME copper stocks continued to fall, domestic copper stocks increased significantly
.
Shanghai copper stocks rose another 18,071 tonnes this week to 295,730 tonnes, an increase of 6.
5%, and Shanghai copper inventories have soared nearly 102% this year, and the current inventory reached a new high
in early May 2016.
Overall, the spot market is still weak, and high inventories will be an important pressure on the copper market in the later period
.

Aftermarket analysis: The surge in copper prices this week is largely due to the Escondida copper mine strike in Chile, which is currently easing to the present event, labor and management are expected to restart negotiations, investors wait and see the further development of the event, short-term sentiment is cautious, some investors have taken profits on the previous rally, copper prices have experienced a wave of consolidation market, and short-term weak shocks are expected
.
However, although the strike incident has received attention from the government and the timing of negotiations, due to the large gap between the conditions between the two sides, the tightening impact of the strike on the supply side is still strong, and copper prices still have strong support
for the rise.
In addition, China's economic stabilization and improvement momentum continues, a new round of infrastructure construction is coming, the outlook for industrial metal demand is optimistic, and the copper price market is still optimistic
.