Shanghai copper shock strengthens short-term recommended shock view

On the industry front, Fitch said the recent recovery in LME copper prices supports its outlook that copper prices will average $6,900 per tonne in 2019, as "record-low LME copper inventories tighten fundamentals and improving sentiment," which is driving prices higher and US-China trade talks are expected to reach an agreement
.

In terms of the market, Shanghai electrolytic copper spot contract reported a discount of 160 yuan / ton - 40 yuan / ton, flat water copper trading price of 49400 yuan / ton - 49620 yuan / ton, and premium copper trading price of 49460 yuan / ton - 49700 yuan / ton
.
The State Council issued the news of value-added tax reduction and launched it on April 1, and the Shanghai copper fluctuated sharply
.
In the morning, the price difference between the current month and the next month contract back structure widened sharply to 500-600 yuan / ton, and the range fluctuated frequently, but the market wait-and-see cautious atmosphere was strong, and the buying interest was seriously weak
.
Near eleven o'clock, the VAT reform was announced to land, the performance of the market was crazy, the price difference in the next month back structure fluctuated sharply, once expanded to 1,000 yuan / ton, the cargo holders basically stopped, the market performance was priceless
.
The pattern of near strength and far weakness reflects the downward adjustment of price costs, and there is a certain expectation for downstream consumption in the future market, but in the short term, the spot premium may remain firm for a period of time after the delivery month
.

In terms of stocks, LME copper stocks stood at 144,625 tonnes on 14 March, up 32,850 tonnes
from the previous session.
As of March 08, 2019, copper cathode stocks on the Shanghai Futures Exchange were 236,169 tons, an increase of 9,120 tons
from the previous week.
From a seasonal perspective, current inventories remain at an average
level compared to the last five years.

Shanghai copper volatility strengthened during the day, as LME copper stocks soared by more than 30,000 tons yesterday, making copper prices weak, but with the determination of the VAT implementation date, copper prices stopped falling and rebounded
.
In the spot market, near eleven o'clock, the VAT reform was announced to land, the performance of the plate was crazy changes, the price difference in the next month back structure fluctuated sharply, once expanded to 1,000 yuan / ton, the holders basically stopped, the market performance was priceless
.
On the technical side, the main 1905 contract of copper will recover, but it is still under pressure on the middle band of the Bollinger band, and the performance of the MACD indicator tends to be stable, and it is recommended to be volatile in
the short term.