Analysis of copper price trend in Yangtze River spot market (7.31-8.4)

Macro: Domestically, China's official manufacturing PMI data was slightly less than expected, but the economic trend of stability and improvement, strong demand is still continuing to drive the improvement of consumption, coupled with the continued decline of the US dollar, driven by the external market rushing to the high level of nearly two years, domestic copper prices have sufficient bullish momentum, hitting a new high
since February 13 this year.
Near the weekend, copper prices pulled back slightly stimulated by the lack of bullish news, and basically remained at a high level
.
Abroad, due to the obstruction of Trump's medical reform, the US economic data is not good, resulting in the economic outlook is bearish, the dollar has rebounded slightly, the impact overshadowed China's strong demand support, but the US dollar index is generally in a weak situation, coupled with the tight supply problem caused by the copper mine strike still exists in the short term, in the case of stable demand, copper prices remain at a high level and narrow range
.

Market: The spot market did not rise sharply this week with the sharp rise in copper prices, and the market lacked
enthusiasm for trading.
Because the current copper market demand has not shown a significant improvement, the downstream willingness to follow the rise is weak, generally on-demand procurement-based, the market rises most merchants wait and see shipments, the mentality of selling at a high price is slightly strong, and the trading situation of low-priced sources is better
.
At present, all areas of copper terminal consumption basically show positive growth
.
From the perspective of the operating rate of processing enterprises, there was no significant decrease compared with last year, and the operating rate in August increased further month-on-month
.
The growth rate of domestic power grid investment completion accelerated, and the demand for wire and cable in the second half of the year was still optimistic
.
And under the background of stable domestic macroeconomic development, it can still drive the stable growth
of copper demand.
In the first half of the year, China's cargo transportation volume increased by 10% year-on-year, and power generation increased by 6.
3% year-on-year, indicating that China's real economy has recovered strongly
since the second half of last year.
From a medium and long-term perspective, domestic copper prices still have endogenous momentum to rise, and you can try to buy
in case of a pullback.

In terms of inventories: London copper stocks continued to decline this week, with a cumulative weekly reduction of 2,350 metric tons to 298225 metric tons, a cumulative decrease of 0.
78%.

Shanghai copper stocks increased by 11,932 tons to 190715 tons this week, an increase of about 6.
67%.

From this week's inventory data, as of this Friday, the copper inventory of the bonded warehouse in the last period showed an increase of 11,932 tons to 190715 tons, Guangdong electrolytic copper inventory slightly increased by 363 tons from last Friday to 21,200 tons, LME copper inventory data fell below the level of 300,000 tons, which also shows that downstream demand remains strong, but the domestic digestion of inventory is obviously not as expected, and it is expected that demand will be difficult to improve in the short term
.

In addition, the improvement of economic data, especially the continuous improvement of Chinese data, has raised the market's expectations for good consumer demand, forming a rising impetus for copper prices, and the weak performance of the US dollar index has also formed a strong support
for copper prices 。 Recently, copper prices have seen a slight correction, mainly because the news of the ban on the import of scrap seven types of copper needs to be really implemented until the end of next year, the actual impact is not expected to be too large, the strike in the three major copper mining areas has temporarily come to an end, coupled with the continuous increase in import sources to ease the tight supply, the off-season consumer demand has been suppressed and slowed down, and production has continued to increase due to a slight correction
under the resonance.
It is expected that copper prices will continue to rise after a slight break in August, and it is expected that the London copper range in August will be 6200-6600, and the main force of Shanghai copper will be 49000-52000
.