Copper prices fluctuated in a narrow range, and the performance was tepid

On the macro front, the US GDP growth rate in the third quarter was as high as 3.
5% year-on-year, the highest growth rate since 2015
.
The US Chamber of Commerce Consumer Confidence Index recorded 137.
9 in September, the highest since
September 2000.
In Europe, Eurozone GDP in the third quarter was 0.
2% quarter-on-quarter, the lowest pace
since 2014.
The German and French manufacturing PMI indices in October both hit their lowest levels in more than two years
.
The US economy continued to be strong, while the weak European economy did not improve, and the economic trends of the United States and Europe continued to diverge, helping the US dollar index to rise, once breaking through the 97 integer mark, putting pressure
on the non-ferrous market.

U.
S.
President Donald Trump warned that if the U.
S.
and China fail to reach an agreement on trade, the U.
S.
could announce tariffs
on all other Chinese exports to the United States in early December.
Therefore, at the G20 summit, whether the two summits can make progress will be related to the future trend
of the trade war.
In addition, China's economic data was weak, with China's official manufacturing PMI recording 50.
2 in October, down from the previous reading and expectations, which also increased market concerns
about Chinese demand.

In terms of inventories, global explicit copper inventories have continued to decline since June, with inventories totaling 84.
84 tonnes on the three major exchanges and bonded zones as of October 26, down 23.
1 tonnes
from the same period last year.
Structurally, LME stocks are less than 140,000 tons, down more than 60%
from this year's high of 388,000 tons.
Foreign inventories continued to fall, also pulling up spot premiums, which were as high as $47/mt this week, indicating tight
spot supply.
The inventory in the previous period increased for four consecutive weeks, the current automotive and air-conditioning industries showed negative growth, downstream consumption was weak, and based on pessimistic expectations for the future market, after copper prices fell, there was no downstream active procurement
.
But the market should not be too pessimistic, with stocks still 4t
below the same period last year.

From the perspective of industry, the cumulative completion of domestic power grid investment from January to September fell by 9.
6% year-on-year, although it was still negative growth, but the decline continued to narrow
.
The media said China may halve the car purchase tax to stimulate the weak auto industry and support
the copper market.

To sum up, as the US midterm elections approach, Sino-US trade issues have not improved, US stocks have suffered several corrections in October, macro uncertainty has increased, coupled with the continued divergence of the US and European economic trends, the US dollar continues to be high, copper prices may continue to come under pressure
.
However, considering that the increase in copper ore is small and the expansion of smelting capacity is at its peak, copper mine supply may be short, and global copper inventories continue to decline, and there is limited
space below copper prices.
Investors are advised to be cautious and wait for the trade situation between China and the United States to become clear
.