The market atmosphere is gradually empty, and copper prices are under pressure to fall

Abroad, the economic data released by the United States in February reflected that its economic operation is still strong, which has greatly boosted investor confidence, but the probability of the Fed's interest rate hike in March has gradually increased, and the short-term strengthening of the US dollar has suppressed
the commodity market.
From the data point of view, the ISM manufacturing index in the United States in February was 57.
7, higher than 56 in January, and hit a new high since August 2014, since October 2016, the ISM manufacturing index in the United States has continued to rise from 51.
5, and the manufacturing industry has shown a continuous expansion trend
.
The US CPI rose 2.
5% month-on-month in January, the largest increase since March 2012, and the PPI in January was 0.
6% month-on-month, and the PPI in January was 1.
6% year-on-year, the highest
growth rate since September 2012.
The recent speech of Fed Chair Yellen gave the strongest signal of a possible interest rate hike in March, coupled with the frequent release of interest rate hike comments by many Fed officials, most Fed officials gradually reached a consensus on the timing of interest rate hikes, and it can be expected that the probability of a rate hike in March will increase
significantly.
In summary, the strong operation of the US economy has a positive impact on the global economy, but the US interest rate hike expectations in March are strong, and the higher US dollar has put some pressure on the commodity market, but the current rate hike expectations are gradually being fulfilled
.

In China, economic data remained stable in February, and the government work report pointed the direction
for the economy in 2017.
From the economic data released in February, the manufacturing industry continued to rise steadily, with the Caixin manufacturing PMI in February 51.
7 and the official manufacturing PMI 51.
6 in February, higher than the previous value of 51.
3, and the data has also stood on the boom-dry line for seven consecutive months since August 2016, further confirming that China's economy is still showing good development and must boost market confidence
.
Inflation data grew modestly, with China's January CPI rising 1.
0% month-on-month and 2.
5% year-on-year, and January PPI rising 0.
8% month-on-month and 6.
9% year-on-year, a new high
in more than five years.
Foreign trade data also performed well, with China's January imports 16.
7% year-on-year (in US dollars) and January exports 7.
9%
year-on-year (in US dollars).
During the two sessions, it can be seen from the content of the Prime Minister's government work report that the probability of the economy continuing to stabilize in 2017 is relatively large, of which the GDP growth is stable at about 6.
5%; Inflation expectations remain, with consumer prices rising by about 3%; In 2017, the official plan to complete the investment of 800 billion yuan in railway construction and 1.
8 trillion yuan in highway and water transportation; in addition, the monetary policy remained stable and tightened, and the official revised the M2 growth rate in 2017 to 12%, and the neutral and tight monetary policy was further confirmed
.
In summary, the probability of maintaining stability in the domestic economy in 2017 is relatively large, which will form a certain support
for commodity prices.

On the supply and demand side, Chilean mine strikes since February have stimulated
copper prices to some extent.
Chile's mining minister Aurora Williams said on March 2 that the 25-day strike at the country's Escondida copper mine will weigh down Chile's copper output while also slumping the country's GDP growth by about 1 percentage point
in February.
The Escondida copper mine, now the world's largest copper mine, saw Chilean copper output fall 12% year-on-year in February, a large drop that has a lot to do with
the strike.
In general, the current supply-side uncertainty is gradually increasing, and the tightening expectation continues to heat up, which has formed a certain positive stimulus
for copper prices.

In terms of inventories, LME copper stocks have continued to decline since the beginning of February, and spot discounts have narrowed
.
Wind data shows that as of early March, LME stocks were 19.
6 tons, down about 60,000 tons from 260,000 tons in early February, and the LME spot discount was $11.
25/tonne, and LME copper stocks have continued to decline since early February, and spot discounts have narrowed
.
Domestically, inventories continued to grow
.
The bonded zone inventory has increased from 490,000 tons in early February to about 596,000 tons at present, in addition to the current domestic inventory of 313,000 tons, COMEX copper stocks of 127,000 tons, LME stocks of 196,000 tons, it can be estimated that the total global inventory is about 1.
232 million tons, an increase from the previous level of 1.
1 million tons, it can be seen that the hidden stocks have obvious signs, and high stocks have also suppressed
copper prices 。 In addition, since the beginning of February, the domestic copper spot market has maintained a discounted state, with a discount range of around 200 yuan / ton, due to the lack of obvious signs of downstream demand recovery in February, the demand side is relatively weak
.

At present, the traditional peak season is approaching, the demand side picks up to support copper prices, copper downstream demand mainly includes real estate and power grid, as the traditional peak season approaches, the north and south construction sites and power grid investment projects are launched, the consumption side will gradually pick up
.
In summary, it is expected that the downside of copper is limited, and it is recommended to buy the dip after the copper price pulls back to
45500-46000.