Copper prices may remain broadly volatile and strong in the second quarter

On the macro front, although the Fed is unexpectedly hawkish in raising interest rates, expectations of three rate hikes this year and two next year have strengthened
compared to only one rate hike in the previous two years.
The strengthening of monetary tightening expectations in the United States is bound to have an impact
on other economies.
Just after the announcement of the US interest rate hike, the People's Bank of China quickly raised policy rates
such as reverse repo again.
While the European Central Bank recently stated that it may not cut interest rates, after the dollar interest rate is significantly above zero and the eurozone is close to the inflation target, the market's concerns about the reduction of assets and liabilities in the second half of the year will not subside and will become an important factor
in the second half of the year.

Throughout the year, the impact of the macro environment on the market is not optimistic, first of all, the Fed still raises interest rates twice throughout the year, while the People's Bank of China will follow the policy interest rate to increase under the demand for stable exchange rates; Secondly, under the demand for financial deleveraging, local governments have successively introduced purchase restriction policies, and the rise and tightening of mortgage interest rates will lead to a decline in real estate sales, thereby dragging down the growth rate of real estate investment, when the investment in real estate-related chains will tend to decline, which in turn will affect consumption
in related fields.

In terms of the market, the recent decline in imported copper concentrate processing fees also hints that the market supply has tended to be tight since the strike at large mines
.
The low growth rate caused by the high interference rate at the copper mine end is widely expected by major institutions, and the amount lost since the strike has not yet exceeded the reduction expected by the agency at the beginning of the year, even so, the domestic concentrate market will still become tighter in the next two months due to the reduction in arrivals, and processing fees will be under pressure
in the second quarter.

Even if the concentrate market is tight, it will not be transmitted to copper concentrate production
for the time being.
On the one hand, the resumption of production of domestic mines since the end of last year is expected to be good, including small and medium-sized mines in Anhui, Sichuan, Yunnan and other places that have been closed due to prices, and the smelting profit advantage of domestic mines has been highlighted
in the case of low processing fees for imported mines.
On the other hand, the marginal increase in crude copper stocks and scrap supply accumulated last year still replenishes the raw material market
.
In the first half of the year, there were many refinery maintenance, the phased decline in smelting demand and the phased tight supply of imported copper concentrate, and the normal production of refined copper will be carried out
normally under the marginal increase in domestic mines, scrap copper supply margin and crude copper inventory replenishment.