Copper strong oscillation operation The upper space is limited

On the macro front, the Fed announced its latest June interest rate decision, and the Fed kept the interest rate unchanged at 2.
25%-2.
50%, in line with expectations
.
The resolution statement abandoned the previous "patient" language on future policy adjustments, saying that the uncertainty about the future economic outlook has increased, gradually showing openness to interest rate cuts, and suggesting that monetary policy changes may occur soon, which is a clear dovish
turn from the previous content.
The strengthening of expectations of interest rate cuts by the Federal Reserve caused the dollar index to fall sharply, providing some support
for copper prices to the upside.
European Central Bank President Mario Draghi recently made it clear that the ECB is ready to cut interest rates, and if necessary, it can restart the bond purchase program that is the core of quantitative easing measures, and the expectation of monetary policy easing in major economies around the world has increased, making the external pressure of China's monetary policy weakened
.
Finally, during the G20 summit, the leaders of China and the United States met for 80 minutes and announced the resumption of economic and trade consultations
.
The US side said that it will not impose new tariffs
on China's exports to the United States.
It also said that U.
S.
companies can continue to sell parts to Huawei, and the U.
S.
Department of Commerce is considering removing Huawei from the blacklist
.
It indicates that new progress is expected in Sino-US trade negotiations, which has greatly boosted market sentiment and strengthened short-term macro risk appetite
.

On the supply side, overseas copper mine disruptions increased sharply in June, with the Chuquicamata copper strike and eventually 75% of workers finally accepting Codelco's latest contract proposal, ending a two-week strike action and returning to work
.
During the strike, the mine's capacity was only maintained at 60%.

The strike action has already led to a reduction in the mine's production to about 10,000 tons
.
Glencore's KOV copper mine collapsed, and 41 people were confirmed to have died in the mine accident, and there is no news
of production stoppage.
The current market copper concentrate transaction TC is below 60 US dollars / ton, small smelters have lost money, and the profits of large smelters have been compressed, which affects the supply
of refined copper to a certain extent.

In terms of copper scrap, the website of the Solid Waste Center published the "2019 Ninth Batch of Restricted Category Publicity Form", and the approval will be publicized
in batches by region.
The first batch of six types of scrap copper import approval list is mainly in Jiangsu and Zhejiang regions, involving a total of 244,000 tons of imported copper scrap, basically the same as last year, the year-on-year decrease in scrap copper imports is mainly reflected in the seven types of scrap, the reduction of approvals is not as much impact as the market expects, and the boost to copper prices is limited
.

In the downstream, the current domestic copper consumption performance is weak, the final value of the PMI composite index of the copper downstream industry in June was 45.
99, lower than the expected preliminary value, and the production index also fell back into the
contraction range.
In terms of real estate, the data are differentiated, and the completed area of housing is more informative for copper consumption, while the cumulative value of completed area of housing from January to May was 267 million square meters, down 12.
4% year-on-year, which had limited
impact on copper consumption.
Under the background of high inventory, the automobile and home appliance industries have experienced a decline in production and sales, entering the destocking cycle, which has formed a certain drag
on copper consumption.
Recently, the China Electricity Union released data on the operation of the power industry, from January to May, the country's major power generation enterprises completed investment of 76.
8 billion yuan in power projects, an increase of 5.
9% year-on-year; The national power grid project completed investment of 115.
7 billion yuan, down 18.
2%
year-on-year.
However, the market generally expects that grid investment will show a certain recovery in the second half of this year, which may give a certain boost
to copper consumption.

To sum up, China and the United States announced the resumption of economic and trade consultations at the G20 Summit, the macro environment eased in stages, and market risk appetite increased
.
In terms of industry, the market has long reached a consensus on the tight pattern of copper supply, but the current consumption of downstream does not have a large bright spot, and further attention needs to be paid to the policy to boost demand, the fundamentals do not support the sharp rebound of Shanghai copper, and it is expected that Shanghai copper will run strongly, and the upper space is limited
.