January 22 Shanghai copper brief commentary

Copper prices extended their narrow range this week
.
For the later trend of copper prices, the long-term trading logic of the market is still dominated by macro, and the economic recovery is expected to be strong after the promotion and use of vaccines, and under the stimulus policy, the currency continues to be loose, and copper prices are still expected to rise
.

On the macro front, global central banks are likely to continue to maintain their current ultra-loose monetary and fiscal policies, and the US dollar is expected to remain weak
.
With the successful completion of the transfer of US power, the market is increasingly looking forward to the smooth landing of fiscal stimulus, risk appetite has been significantly improved, the price of risk assets represented by copper has generally risen, and the European Central Bank's interest rate decision in the evening is basically in line with market expectations
.

In the spot market, holders actively adjust prices, buying sentiment is low, downstream demand is weakening, and transactions are weak
.
China's smelting capacity continues to climb, and copper scrap imports have increased significantly, but copper concentrate supply is tight and inventories are relatively low
.

On the fundamental front, the CSPT team finalized the floor price for copper concentrate processing fees for the first quarter of 2021 at $53/mt and $5.
3/lb, down $5 and 0.
5 cents from Q4 2020, indicating that the market remains pessimistic
about future copper concentrate supply expectations.
On the demand side, China's current control of the new crown epidemic is still very successful, and the new energy and new infrastructure sector will continue to pull copper demand, with the off-season delayed, the next peak season to warehouse is likely to form a strong support
for copper prices.