Analysis of copper price trend in Yangtze River spot market (5.1-5.5)

Macro: China's Caixin manufacturing PMI in April was lower than expected, some analysts believe that the recent Chinese economy may show a downward trend, while the US ADP in April added 177,000 jobs, the growth rate hit a new low since October last year, investors' confidence level in the current and future economic conditions of the United States has fallen, short-term market sentiment is empty, copper prices are under pressure
。 In addition, in the context of the downturn in the real estate market and the decline in aggregate demand, it is difficult for domestic demand for copper to improve significantly, although it is currently in the traditional consumption season, but there is still a phenomenon of low peak season, investors are worried about the outlook for copper demand, copper prices are under pressure to give up the previous gains
.

Market: Affected by the continued decline in spot copper prices during the week, holders actively pushed up the premium, but the downstream is obviously unable to receive goods in the face of high prices, so the increase in the water adjustment at the beginning of this week is relatively limited, and there are even signs of a short-term decline in the afternoon, and the market transaction in the first two days is relatively flat
.
However, with the sharp decline in copper prices after that, spot copper premiums rose rapidly, and holders have unwound to make profits
.
And next week's low price is the willingness to receive goods is also strong, so the market once traded hot
.
However, this status quo did not last long, because the overall market sentiment is still bearish, the actual stock volume of downstream merchants is not very large, and they return to the wait-and-see
after completing the market procurement.
From the perspective of market supply, there are many domestic sources in the spot copper market this week, but the source of imported copper is slightly insufficient due to the closure of the arbitrage window, so the phenomenon of oversupply in the market is not obvious, and the flat water copper in the wet copper source is sought after by the market at a low price, so the transaction situation is not bad, and the price difference with the good copper source is also small
.
Overall, the spot copper market performed mediocrely
this week.

In terms of inventory: London copper stocks soared this week, with a cumulative increase of 94,925 metric tons to 354,650 metric tons, a cumulative increase of 36.
55%, a new high since the beginning of October 2016, and the sharp increase in London copper inventories caused a large negative impact on the market in the short term, seriously reducing copper price performance
.
Shanghai copper inventories fell by 14,130 tonnes to 215231 tonnes this week, down about 6.
16%, to a nearly 13-week low
.
Overall, the recent recovery of LME copper inventories shows that market demand is still weak, and the high copper inventories in the later period may continue to pressure the market
.

Future market analysis: The global macroeconomic recovery is relatively moderate, but the tightening of funds still puts pressure on copper prices, coupled with the upcoming US non-farm payrolls report in April, investors are more cautious due to the poor performance of the latest US economic data, and the metal market sentiment may be further pressured
.
In the market, although the traditional consumption season has arrived, due to the global economic downturn, downstream factories are still mainly consuming their own inventory, and consumption in the market is always limited
.
Overall, the outlook for copper demand is still not optimistic, with the end of the consumption season, the supporting role of terminal consumption on copper prices will gradually weaken, short-term copper prices may have adjustment demand after a sharp decline, and maintain a bearish idea
in the medium term.