Reduced domestic warehouse receipt inventories supported Shanghai copper prices in the short term

In the external market, as of now, LME copper opened at $7900.
00 today, the highest price was $7955.
00, the lowest price was $7871.
00, and now it is trading at $
7890.
50.

On the macro front, data from the US Department of Labor showed that the US consumer price index (CPI) rose by more than 8% year-on-year for three consecutive months from March to May, and the CPI increased by 9.
1% year-on-year in June, a new high
in nearly 41 years.
On July 21, the ECB announced that it would raise the three key interest rates by 50 basis points, which was higher than the market had previously expected by 25 basis points and exceeded the ECB's forward guidance
in June.
The US Federal Reserve announced a 75 basis point interest rate hike on the 27th, raising the target range of the federal funds rate to between
2.
25% and 2.
5%.
This is the fourth rate hike by the Fed so far this year and the second consecutive rate hike of 75 basis points
.

On the supply side, in the week of July 1, CSPT held an online meeting to finalize the guidance price of copper concentrate spot TC of US$80/dry ton in the third quarter of 2022, unchanged from the second quarter
.
Overall supply and demand continued to improve month-on-month in July, but remained slightly lower than the same period last year, and the intensity of consumption recovery after the easing of the epidemic was weak
.
Under the influence of the resumption of production of Shandong refinery and the recovery of production after the end of centralized maintenance of domestic refineries, the supply of refined copper is expected to gradually increase, and the subsequent or continued accumulation
.
However, domestic inventories are declining, and although the trade link shows poor buying interest, the decline in inventories and higher premiums confirm that the current demand is still in repair
.

On the demand side, in June, China's power grid investment was 64.
2 billion yuan, an increase of about 26% year-on-year and about 74%
month-on-month.
In June, China's air conditioning production was 22.
2143 million units, a year-on-year increase of 4.
4%; Exports of air conditioners were 3.
63 million units, lower than the same period of the previous year, and external demand performed poorly
.
In June, China's automobile production and sales reached 2.
499 million units and 2.
502 million units, up 28.
2% and 23.
8%
y/y, respectively.
NEV production totaled 590,000 units, up 1.
3 times
y/y.
In July, the overall demand was poor, the operating rate of copper pipes and copper rods and processing fees fell, except for the direction of automobiles, other areas entered the seasonal consumption off-season, and downstream procurement remained cautious
in the price decline.

Overall, risk sentiment has risen, and risk asset prices have generally risen
.
From a fundamental point of view, the reduction of domestic warehouse receipt inventories and the high level of spot premiums support short-term prices
.
The risk point is that high inflation in the United States may drive stronger expectations of interest rate
hikes.