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Since the beginning of June, under the strong pressure of the continuous intensification of the Sino-US trade war and the continuous strengthening of the US index, the market bearish sentiment has heated up sharply, and the copper price has fallen sharply from 54,000 yuan / ton to 48,000 yuan / yuan, a drop of 11%.
Investor mentality in the copper market has also fluctuated
.
After the copper price in the over-fall, with the realization of bearish sentiment and the State Council executive meeting conveyed a positive signal, indicating that it will be more active in the use of fiscal policy, and the use of loose and moderate monetary policy, market confidence has gradually been restored, A shares have built a bottom, Shanghai copper main force in the 48500 yuan ton line to get obvious support, superimposed on the fundamental end of the favorable support, copper prices out of a wave of rebound market, such as macro aspects of the temporary deterioration, copper prices are expected to rise to 51500 yuan / ton line
.
On the macro front, China released economic data for the first half of the year, and the GDP growth of 6.
7% in the second quarter was in line with expectations, down 0.
1 percentage points from the first quarter, and the overall operation of China's economy was stable
.
However, in the context of deleveraging, the limited source of funds restricts infrastructure investment, the growth rate of fixed asset investment continues to hit a new low, the added value of industries above designated size is less than expected, and there is still greater pressure
on China's economy in the second half of the year.
The escalating Sino-US trade friction and the increasing tariff list are undoubtedly the root cause of the recent sharp decline in copper prices
.
However, as expectations of trade frictions have been relatively sufficient, the panic in the market has eased
.
From a fundamental point of view, there are still strikes on the copper supply side, but they have not attracted market attention
.
According to statistics, there are still 16 salary contracts expired in the second half of 2018, which involved about 60%
of the total number of mines negotiated throughout the year.
Recently, Escondida copper miners have had a difficult negotiation with BHP Billiton, and no consensus has been reached, and the risk of a strike has increased
.
Negotiations with Lumina Copper's Caserones copper mine in Chile broke down, paving the way
for a potential strike.
Labor tensions have increased uncertainty
in the copper market.
On the demand side, July entered the traditional consumption off-season
.
The data shows that it is expected that the average operating rate of copper enterprises in July will be 82.
16%, down 0.
24 percentage points from the previous month, an increase of 9.
98 percentage points year-on-year, and the operating rate of copper pipe and copper rod wire will increase
year-on-year.
In terms of stocks, as of July 20, the previous period undercounted about 211,000 tons, down about 60,000 tons from 272,000 tons on June 1; COMEX stocks were 216,000 tons, down 15,000 tons from 231,000 tons on June 1: LME stocks were 255,000 tons, down about 62,000 tons
from June 1.
Copper prices remain low, and the price difference between refined waste is small, attracting downstream enterprises to purchase refined copper, and downstream demand is expected to continue
under the condition of weak copper prices.
In addition, from the perspective of the seasonal trend of spot premium discount, the current premium structure is not significantly weaker than in the past two years, reflecting that the downstream demand performance is relatively stable, the current round of copper futures prices fell sharply, spot passively followed, the premium performance is firm, forming a certain support
for copper prices.
On the whole, there is still a strike problem on the copper supply side, there is a possibility of escalation, the short-term supply elasticity is not large, and the demand side has not weakened
significantly.
Inventories have fallen sharply recently, and spot prices have also supported
copper prices.
In the short term, the bearish benefits of the current trade friction have been fully realized, and it is expected that the new impact in the future will be limited, and the overall pessimistic expectations have also been eased
.
With the stabilization of the macro, copper price support factors such as strikes, demand stability, and destocking in the fundamentals will be re-focused
by the market.
If the trade friction does not further worsen and escalate, the current copper price is more likely to stabilize and rebound
.
In anticipation of the depreciation of the RMB, the trend of Shanghai copper will be slightly stronger than that of London copper
.
However, the international situation is complicated, and the policy uncertainty in all aspects is also large, and the trend in the middle and late stages needs to continue to be paid attention to
.
