Inventory dematerialization continues The copper market is expected to remain strong

Above the copper market, China's copper mine imports fell 8% in May, and the pressure of domestic smelter maintenance increased, and scrap copper imports still declined
.
Last week's main news was Chile, the escalation of the epidemic began to affect Codelco production, the Chilean Mining Association increased Chile's exposure to the epidemic from no more than 1% predicted earlier to 3.
5%, or 200,000 tons, the market is worried that supply support copper prices on Friday to refresh the rebound high
.
We tend to see the copper rally having moved into the high zone, with resistance at $6200/$6400 and support at $6083 at the 200-day EMA
.

Industry News:

1.
Last Thursday, in an effort to stop the spread of the new coronavirus, Chile's national copper company announced the temporary closure of the refinery and foundry of the Chuquicamata mine
.
However, as the shift ends, operations will gradually return to normal
.
Minor production and maintenance work will continue during the shutdown, with 400 workers currently evacuated
.

2.
Chile's mining minister said that due to the new crown epidemic, the country's copper production may be reduced by 200,000 tons, which accounts for about 3.
5%
of the country's copper production in 2019.
In addition, he applauded
the temporary closure of the smelter at the Chuquicamata copper mine by Chile's national copper industry.
Not long ago, a worker at the Chuquicamata mine, Jimmy Rojas Mondaca, died
of the coronavirus.
On Sunday, a worker named Omar Manosalva was reported dead
at Chile's Ministro Hales mine, owned by the national copper industry.

3.
According to data released by the General Administration of Customs of China, China's refined copper imports in May were 305,700 tons, an increase of 22.
73%
year-on-year.
Among them, Chile is still the largest supplier of refined copper to China, importing 81,700 tons of refined copper from Chile in May, an increase of 21.
59%
year-on-year.

Fundamental changes: 1) domestic refined copper stocks remained degraded, and LME stocks fluctuated around 220,000 tons; 2) Copper concentrate TC weakly stabilized around $51, Chile's supply-side disturbance partially cashed in, some refining links were shut down for a short time, Chile's mining minister said copper production would decrease by 3.
5%; 3) The spot premium of electrolytic copper remained high before the holiday, especially in Guangdong, where the premium floated at the 400 line
.

During the Dragon Boat Festival, affected by the second outbreak of the epidemic in the United States, the overall decline of global risk assets fell sharply, but the trend of copper prices was slightly differentiated, and part of the supply disturbance in Chile was realized, so that copper prices were separated from the macro impact in the short term, returning to fundamental logic, and the price of London copper exceeded $6,000 intraday
.
From the perspective of Shanghai copper operation, domestic inventory dematerialization is still continuing, the upward pattern of prices has not been broken, people's minds are rising, after the formation of substantial disturbances in Chilean supply, Shanghai copper is expected to remain strong during the week, and prices may form a breakthrough and return to the high level
before the Spring Festival.
Operationally, it is recommended that the main force form an effective breakthrough of 48000 and then chase long, pay attention to the drag of macro bearish factors, and set a short-term stop loss to hold
flexibly.