Domestic inventories continued to decline, and Shanghai copper shocks rebounded

Market focus: (1) Regarding the Chinese National Congress deliberation of the bill on safeguarding national security in Hong Kong, US President Trump has publicly stated that if China passes Hong Kong legislation, the United States will have a strong response
.
(2) Mysteel data, as of May 22, China's copper mine port inventory was 726,000 tons, a weekly decrease of 34,000 tons; copper smelting and processing fees TC was 53 US dollars / dry ton, which continued to be at a historical low level
for four consecutive weeks.

Spot analysis: On May 25, spot 1# electrolytic copper was quoted at 43750-43830 yuan / ton, with an average price of 43790 yuan / ton, up 10 yuan / ton
per day.
Shanghai's recent inventory shows a further decline, the willingness of holders is strong, morning traders lead the market transaction, high activity, downstream bargain hunting
.

Warehouse receipt inventory: Shanghai copper warehouse receipts totaled 59,954 tons on Monday, a daily decrease of 3,371 tons, a decline of 6 consecutive days; On May 22, LME copper stocks were 271775 tons, down 550 tons per day, down for six consecutive days
.
As of the week ended May 22, the previous Shanghai copper inventory was reported at 175825 tons, down 33,065 tons
weekly.

Main positions: the top 20 long positions of Shanghai copper main 2007 contract were 61925 lots, minus 3135 lots per day, 75285 short positions, 5673 lots per day, net short positions 13360 lots, daily minus 2538 lots, long and short are reduced, net space is reduced
.

Tensions between China and the United States have heated up, and market risk aversion has increased; At the same time, the government work report of the two sessions of China was released, and the overall fiscal stimulus was lower than market expectations; And the overseas epidemic continues to spread, bringing greater resistance to demand recovery, and copper price upward momentum can weaken.

However, China's copper processing fee TC continues to be low, copper mine supply is tight, and the epidemic situation in South America is not optimistic, which may once again affect copper mine production; The recovery of domestic economic activity, the expansion of infrastructure investment, and the continued downward trend in Shanghai copper inventories supported copper prices
.
In terms of spot, Shanghai's recent inventory shows a further decline, the willingness of holders is strong, morning traders lead the market transaction, high activity, downstream bargain hunting
.
Technically, the main 2007 contract of Shanghai copper reduced its position, and the mainstream position increased and reduced the short, and it is expected that the short-term shock will be strong
.