Market sentiment warms Shanghai copper rebound strength is not optimistic

Prices edged higher
on a short-term warmer market sentiment and marginal improvement in copper fundamentals.
However, short-term prices are still difficult to have a trend upward, some countries led by the United States have not reached the inflection point, and at the same time need to be vigilant against the outbreak of rotation in the southern hemisphere, the cycle of global epidemic prevention and control determines the pricing logic of the fundamentals in the year, and also determines the rebound height of copper prices in the medium term.

At present, the upward momentum is insufficient, sell wide straddle and continue to hold, waiting for the expiration to collect the time value
.

Industry News:

1.
According to news, BHP Billiton confirmed that two cases
of new coronavirus infection were confirmed at the Escondida copper mine in Chile.

2.
According to foreign sources, three smelter sources said that a video conference at China's major copper smelters failed to reach a consensus
on the copper concentrate processing fee floor price (TC/RCs) for the second quarter of 2020.
Uncertainty
due to the coronavirus pandemic.
The first quarter was $67 a tonne, or 6.
7 cents
a pound.

3.
According to news, two sources at the smelter said that Australian miner Minmetals Resources announced that the Las Bambas copper mine suffered force majeure due to Peru's blockade to fight the new crown pneumonia epidemic
.

Last week, copper prices showed a volatile adjustment trend, and the center of Shanghai copper prices moved
slightly upward.
The impact of the epidemic on the economy began to be reflected in the economic data of overseas countries, the number of unemployed in the United States soared, and the European waiter PMI was close to being cut, but the domestic manufacturing PMI rose to 52%, superimposed on the RRR reduction stimulus, which played a certain role
in boosting market confidence.
In addition, the call between the United States and Russia on the oil price issue stimulated the rise in oil prices, which also played a good role in stimulating the market atmosphere
.
However, the recent focus of the market is still on the overseas epidemic, although some countries have a turning point in new cases, but the global outbreak stage, from sentiment to supply and demand, suppressed copper price trend weakening is difficult to reverse
.

As far as copper supply and demand is concerned, as the southern hemisphere countries enter a state of emergency affecting copper concentrate production and shipments, the market is worried that supply TC will continue to decline, while the resumption of domestic downstream production will drive spot inventories down, but considering the shrinking overseas demand, it is expected to enter the accumulation stage
again.
At this stage, copper price fluctuations are priced entirely on the basis of its financial attributes, and although the most panicked phase has passed, the impact of demand has not yet been fully reflected
.
In the short term, due to the improvement of market sentiment, stimulus policies in various countries and the rebound of crude oil, copper prices may rebound, but they are not optimistic about the strength of the rebound, and the weakening trend of copper prices has not been reversed
.
Operationally, it is recommended to be cautious and actively seize the opportunity given by the rebound to reduce risk exposure
.