Sino-US relations further tense copper prices may be under pressure in the short term

In terms of the market, in the week of July 24, domestic spot copper prices continued to fluctuate
.
The average price of Yangtze River nonferrous metal net 1# copper was 51896 yuan / ton, up 62 yuan / ton per day, and the weekly line rose 0.
60%; The average price of the previous week was 52142 yuan / ton, down 246 yuan / ton compared with last week, down 0.
47%
from the previous week.

In terms of stocks, London copper stocks continued to decline last week, with a cumulative decrease of 15,625 metric tons to 141725 metric tons, a cumulative decrease of 9.
93%.

Shanghai copper inventories deteriorated slightly last week, falling by 963 tons, or 0.
61%, to 157684 tons
.

The domestic off-season effect is gradually emerging, and the supply of refined copper is slightly abundant, but the inventory is still at a low level overall; Overseas demand has gradually recovered, and LME inventories have continued to deteriorate recently, falling by nearly 50%
from their May high.
Uneven global economic recovery and fears of a second outbreak weighed on the outlook for commodity markets, with copper prices remaining volatile
last week.

On the macro front, China's economy continued to improve in the first half of the year, and UBS sharply raised its full-year economic forecast, expecting a year-on-year growth of 2.
5%, significantly higher than the previous forecast of 1.
5%.

The EU has agreed on a €750 billion recovery fund to help member states weather the crisis and restart their economies
.
The epidemic situation in the United States is still grim, which may make it difficult for the US economic recovery to outperform other countries
.
Further tensions between China and the United States have also put pressure
on copper prices to the upside.

Supply remains tight at the mine end, with both BHP Billiton and Freeport experiencing declines in copper production in the second quarter, and BHP Billiton cutting its copper production forecast
for the 2020-2021 fiscal year.
In addition, the Las Bambas mining group convoy in Peru was attacked by protesters, and there is still uncertainty
about the strike at the Chilean copper mine.
As the price spread of refined waste continues to expand, the substitution role of copper scrap gradually appears
.

At present, China's overall economy has recovered steadily, industrial production has rebounded significantly, and further recovery is expected in the second half of the year, and Standard Chartered expects China's economy to return to pre-epidemic levels
by the end of the year.
State Grid will increase its annual investment plan, and more than 60% of the investment will be completed in the second half of the year, which means that the investment and construction of the power grid will accelerate; The impact of the epidemic in South America continues to ferment, and it is difficult to alleviate the tension at the mine end in the short term; However, the domestic market ushered in the traditional off-season, overseas demand is still in the recovery stage, the recent Sino-US relations have further tensions, global risk appetite may be hit, and copper prices are expected to be
under pressure next week.