Shanghai copper low finishing cautious short-term rebound

In terms of news, the Fed announced a 50BP interest rate cut overnight, and the performance of overseas metal markets was flat, which was due to the fact that on the one hand, the market had expectations for this, and on the other hand, the sharp interest rate cut also confirmed the possible serious impact
of the overseas epidemic on the economy.

Changes in copper fundamentals: downstream gradually resumes work, but at a slower pace; The refined copper social treasury continues to rise, the apex still needs to be waited, and the nonferrous metal association proposes to collect and store, but the total amount of the social treasury and copper price are not yet urgent, and the probability of storage and storage is expected to be low; Weekly TC continued to rise, copper concentrate short-term supply was loose; The sulfuric acid problem restricts the production of smelters, but it is mostly a phased phenomenon, and the demand for sulfuric acid is expected to recover
after the production in central China gradually recovers.

Industry News:

1.
According to foreign news on March 3, China's copper smelters are looking for crude copper to partially make up for the decline
in output caused by the epidemic in February.
Crude copper is an intermediate product
in the copper smelting process.
According to data released by Fastmarkets, the spot CIF China processing fee for crude copper with a copper content of 98-99% is quoted at $135-145 per tonne
.
That's up about $5 from a month ago
.

2.
In 2019, China's copper pipe output was 2.
83 million tons, a year-on-year increase of 1.
8%, down 5.
1 percentage points from 2018; net exports were 162,000 tons, a year-on-year increase of 5.
6%; The apparent consumption reached 2.
668 million tons, an increase of 1.
5% year-on-year, achieving a double growth
of production and consumption.
Nevertheless, China's copper pipe industry is also facing the pressure of reduced orders and low-price competition caused by consumption obstruction
.
According to Antaike, in 2019, affected by the weakness of the air conditioning and refrigeration industry, copper pipe companies generally reduced their processing fees by about 800 yuan per ton in order to compete for market share, and profit margins were further squeezed
.

The main contradiction in copper prices in the short term is the spread of overseas epidemics, and from the perspective of prevention and control measures, Europe and the United States are extremely
risky.
Under the premise that the epidemic does not interfere with normal overseas production activities, London copper 5500 and Shanghai copper 44000 have certain support, if the overseas situation deteriorates, copper prices will continue to bottom, so be cautious about short-term rebound, it is recommended to focus on light short selling operations
.
Medium-term copper prices are still expected to rebound, but the risk of possible setbacks in overseas demand will weigh on the rebound height and delay the rebound time, and bulls are
patient.