Shanghai copper rebound is weak, consumption improvement still needs to wait

Copper prices recovered
slightly at the beginning of the week amid China's introduction of new measures to stimulate the economy and boost the market.
But the slowdown in the global economy, especially the weak manufacturing sector, has put pressure on copper prices again
.
U.
S.
manufacturing contracted for the first time in nearly a decade, the first sign that slowing growth in the sector could translate into a full-blown contraction in economic activity, while manufacturing weakness in the eurozone remained unchanged, and weak data from the three major industrial metal consumers of China, the United States and Germany exacerbated the decline
in copper prices.
Bank of America Merrill Lynch lowered its copper price forecast for this year and next to $6,033 and $5,750 a tonne
.

In terms of the market, in the week of August 23, domestic spot copper prices fell sharply this week
.
The average price of copper in Yangtze River nonferrous metal net 1# was 46466 yuan / ton, down 24 yuan / ton per day, and down 0.
26% on a weekly basis; The average price of the previous week was 46,528 yuan / ton, down 62 yuan / ton compared with last week, down 0.
13%
from the previous week.

In terms of inventories, London copper stocks fell first and then rose last week, falling by 50 metric tons to 331925 metric tons, a cumulative decrease of 0.
015%.

Shanghai copper inventories fell back last week, falling by 6,257 tons, or 3.
84%, to 156573 tons
.

Citi said copper demand was hit by the trade war, with China's copper end-user tracking index falling 0.
8% year-on-year in July, already showing negative growth
for the third consecutive month.
Wood Mackenzie expects China's refined copper consumption to grow by only 1 percent this year, just over half
of the global level, as economic growth slows.
At present, the status quo of the off-season of domestic consumption has not changed significantly, social inventories continue to accumulate, the Shanghai-London ratio remains high, the import window continues to open, the inventory in the bonded area continues to return, and copper prices continue to be weak under pressure
.

Copper Market News:

1.
Codelco, the world's number one copper producer, said it had closed its Ventanas smelter along Chile's central coast for overhaul
.
Codelco said in a brief statement that the shutdown began on Monday, but it did not say when it would be closed or how it would affect
production.

2.
Zambia's mining minister said that once the disputed liquidation of the Konkola copper mine is over, the Zambian government will decide to "urgently" find another investor for the copper mine
.
Since Lusaka appointed liquidators to manage the Konkola copper mine in May, Vedanta Resources has been locked in a dispute
with the Zambian government.
The mine is 20% owned by Zambian state-owned ZCCM-IH, with the remainder held by Vedanta
.

Looking ahead, there are expectations
of improvement in the fundamentals of the copper market.
The National Energy Administration revealed that a new round of rural power grid transformation and upgrading will be completed before the end of the year, one year earlier than the original plan, transformers, cables, box-type substations and other major equipment procurement will have a significant increase, copper rod consumption will be boosted to a certain extent
.
In addition, car consumption will also be marginally repaired, and car sales in the second half of the year will be better than in the first half; Real estate starts continue to grow, or will be transmitted to the completed area of houses, driving copper consumption
.
Although consumption improvement still needs to wait some time, most terminals are in the off-season, and this month is expected to refine copper production is still high, but the domestic spot end continues to rise, refined waste price spread shows further narrowing, refined copper on copper scrap substitution effect increases, there are favorable factors on the industrial side support, it is expected that copper prices will continue to fluctuate
next week.