Shanghai copper entered shock mode in the short term, and the market is still repeated

Domestically, the central bank said at the end of last week that the reduction of the balance sheet was not a shift in monetary policy, and set a 4-6 month buffer period between the self-inspection and supervision of commercial banks and the standardization of rectification work, coupled with the central bank's MLF operation scale of nearly 460 billion yuan on that day, the central bank released a signal
to the market that the short-term monetary tightening speed has slowed down slightly.
In this context, the synchronous decline of stocks, bonds and commodities will be improved, copper as a commodity with strong financial attributes, does not have a basis for a sharp decline in the near future, on the contrary, due to the easing of market tension, short-term or rebound space
.
However, the height of the rebound depends on the position cooperation, if the rebound is still maintained to reduce the position, there is not much
room for upward.

Abroad, since the beginning of this year, the dollar index has oscillated downward, falling from a maximum of 103.
8 to a low of 98.
5 in early May, but global commodities have not been driven by the decline of the dollar and rose, because the market has strong expectations
for the United States to continue to raise interest rates and reduce the balance sheet this year.
In the short term, macro guidance for commodities is not strong, and price movements depend more on changes
in supply and demand.
International copper is still in an atmosphere of intertwined with long and air, and it is inevitable to fall into oscillations
.

There is limited
room for copper inventory growth.
From May 3 to May 5, LME copper stocks increased by more than 30,000 tonnes for three consecutive days, causing copper prices to rebound, but stocks fell
again in the following week.
Given that international copper concentrate supply remains tight, this increase in stocks is similar to the two increases in early March and early December, both of which fell significantly later
.
The LME copper spot discount was not amplified by the increase in inventories, but fell slightly from the end of April, indicating that copper supply has not changed
significantly due to this increase in stocks.

The recent significant increases in copper stocks, all in the Asian region, are expected to be closely related to domestic exports, most of which are processed trade in copper concentrates (exempt from 15% tariff).

Considering that the tight supply of international copper concentrate is still continuing, and China is still essentially a copper-deficient country, the potential for further domestic exports is limited
.

Inventories continued to decline, falling below 200,000 tonnes as of May 12, down more than 120,000 tonnes
from the year's high in mid-March.
COMEX copper inventories have continued to increase since May last year, but since the beginning of May, the upward trend has slowed or even declined
.
Overall, copper inventories on the world's three major exchanges have generally fallen recently, supporting copper prices to stabilize, but the rebound is constrained
by the expectation of US interest rate hikes and balance sheet reduction.

In summary, the recent decline in copper prices basically digested the negative impact of the sharp increase in LME copper inventories in early May, but the expectation of interest rate hikes and balance sheet reduction in the United States in June strengthened, and Shanghai copper may enter oscillation mode
in the short term.
From the recent performance of Shanghai copper, the operability is not strong, investors can use Shanghai copper as an indicator
of the operation of other commodities.