Shanghai copper's downward space narrows in the short term or ushered in a rebound

Domestically, at the end of last week, the central bank explained that the recent balance sheet reduction is not a shift in monetary policy, and arranged 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 of nearly 460 billion yuan on the same day, the central bank released a signal
to the market that the recent monetary tightening has eased.
In this context, the situation of the three killings of stock companies in the early stage will be improved, copper as a commodity with strong financial attributes, does not have a macro currency background of sharp decline in the near future, on the contrary, due to the easing of market tension, short-term or rebound, space or depending on the position cooperation
.

Abroad, since the beginning of this year, the dollar index has fluctuated downward, from a maximum of 103.
8 to a low of 98.
5 in early May, but global commodity prices have not been driven by the fall of the dollar and rising, because the market has strong expectations for the United States to continue to raise interest rates and shrink the balance sheet this year, and in mid-June, when the US interest rate meeting gradually approaches, the market will gradually be disturbed, and from the end of May to the beginning of June, commodities will be weakened by the impact of the dollar
.

In terms of stocks, from May 3 to 5, LME copper stocks increased by more than 30,000 tons for three consecutive days, causing copper prices to rebound and die
.
Inventories fell again in the following week, and stocks repeated this week, but given that international copper concentrate supply remains tight, the sustainability of this increase may be similar to the three inventory increases in early March, early December and mid-August, all of which fell significantly
shortly after 。 It is worth noting that the recent LME copper spot discount has not been amplified by the increase in inventory, but has converged significantly at the end of April, with a discount of $17 as of Wednesday, a sharp convergence from the highest discount of $33 in early May, which also shows that copper supply has not changed
significantly due to this increase in inventory 。 Given that these significant increases in copper stocks are in the Asian region, they should be closely related to domestic exports, while most of the domestic exports are still processing trade in copper concentrates (exempt from 15% tariff), and given the continuation of tight international copper concentrate supply and the fact that the country is still essentially copper-deficient, 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 this year's high in mid-March, and futures warehouse receipts fell more than 100,000 tonnes
from this year's peak.
COMEX copper stocks have continued to increase since May last year, but since the beginning of May this year, the upward trend has slowed or even declined
.
It is judged that the increase in LME copper stocks is limited, and the probability of falling again in the near future is relatively large, while the inventory decline in the previous period is obvious, and the COMEX inventory has been slightly reduced, in this context, the negative factors of the previous price due to the large increase in inventory will gradually fade
.

In summary, due to the slowdown in the pace of domestic macro tightening and the expectation of the US dollar interest rate hike market, and due to the tight supply of copper concentrate, the limited space for copper inventory to increase, we judge that the recent decline in copper prices has basically released the bearish shadow of the sharp increase in LME copper stocks in early May, and the futures price will rebound
again in the short term.
Operationally, you can try to buy a small amount on the main July contract of Shanghai copper, the area is the 44800-45000 line, the stop loss is 44500, and the target is 46000-46200
.