Analysis of copper price trend in Yangtze River spot market (2.6-2.10)

Macro: In the week before the Spring Festival, benefiting from the previous temporary liquidity facilitation operation, the overall capital level stabilized
.
However, judging from the disguised rate hikes of MLF, reverse repurchase and SLF funding rates before the Spring Festival to the first day after the holiday, the deleveraging tone will be maintained in the new year, and monetary policy may turn to tightening
.
From the perspective of the impact of the increase in the funding rate on liquidity, in the short term, although there will be a total of nearly 1.
85 trillion reverse repurchase and MLF maturity in the two weeks after the holiday, the previous TLF operation has replenished the market with considerable liquidity, so the capital surface may temporarily breathe, and the commodity market will also benefit
.

Market: This week's market trading is light, smelters basically do not ship, large traders ship more actively, market trading is mainly concentrated in moving goods between traders, but traders procurement demand is not good
.
The operating rate of downstream manufacturers is low, and some small and medium-sized manufacturers have postponed the resumption of work, and it is expected to fully resume work around the 15th of the first month, so downstream demand is weak
.
On the last trading day of the week, market trading was concentrated in the mainstream trading hours in the morning, mainly traders moved goods, and downstream manufacturers purchased little
.

In terms of inventory: data released by the London Metal Exchange on February 10 showed that London copper inventories decreased by 3,325 metric tons to 248,200 metric tons, and the proportion of LME copper write-off warehouses to inventory on the 10th was 44.
46%.

Last week, London copper stocks fell by 8,950 metric tons to 248,200 metric tons, a decline of nearly 3.
5%, a nine-week low
.
Shanghai copper inventories rose 53,806 tonnes to 277659 tonnes last week, up 24%, a new high in nearly nine months
.
Overall, the short-term domestic inventory pressure is still large, and it is expected that the supporting effect of the spot market on copper prices in the later period is limited, and the long-term price trend remains to be seen
.

Future market analysis: Overall, copper prices have been greatly affected by the macro in the near future
.
The central bank's disguised interest rate hike after the holiday shows that China's monetary policy has tightened and the inflection point of liquidity has been confirmed
.
However, with 1.
85 trillion reverse repos and MLF in place in the past two weeks, there will be some respite in funds, but the recent market support factors are mainly concentrated in the supply concerns
disrupted by the Escondida construction incident in Chile's largest copper mine.
The subsequent impact on copper prices needs to pay attention to the duration of the
strike.
For the time being, due to the weak influence on the market due to the lack of full recovery of spot goods after the holiday, the impact of overseas Indonesian export restrictions and strikes still needs to be further observed
.
The peak consumption season of copper is gradually coming, and downstream procurement demand is expected to gradually develop, and copper prices are expected to support strengthening
.