The market returns to the demand side Copper prices will show a volatile adjustment trend

On the macro front, the overseas epidemic situation has not completely improved, and it is difficult to say optimistic
.
As far as supply and demand are concerned, copper prices are in a game between strong reality and weak expectations, and it is expected that the short-term will continue to maintain a strong trend of volatility under the support of the spot side
.
As far as copper supply and demand are concerned, the impact of the epidemic in American copper ore exporters has also led to the continuous disruption of raw material supply, and the domestic market is worried that the supply TC will continue to decline, in addition, copper scrap as a total component, the impact of the epidemic on the recovery / export of scrap copper is more significant, coupled with the low price spread of refined scrap, the operating rate of scrap copper enterprises is low
.

Industry News:

1.
Freeport-McMoRan said Friday that it cut its full-year 2020 copper production forecast by 400 million pounds to 3.
1 billion pounds, down 11 percent
from its previous estimate released in January, as a result of new measures in response to the coronavirus pandemic.
New measures in response to the pandemic include the continued suspension of the company's two mines, project postponements, and adjustments to the operational plans
of mines that remain open.
Kathleen Quirk, chief financial officer of Freeport, said that in the United States, we have reduced our extraction rates
by about 20% across the board.
These raw materials still exist and will be available in the future as market conditions permit
.
Quirk added that the reduction in mining rates in the United States will continue until 2021, but mines such as Grasber in Indonesia in the freeport are expected to increase production
during this time.

2.
In accordance with the principle of "enterprise storage and storage, bank loans, financial subsidies, market operation, and self-responsibility for profits and losses", the province's key non-ferrous metal products such as copper, aluminum, lead, zinc, tin, germanium, indium and other key non-ferrous metal products are commercially collected and stored, with a total amount of about 800,000 tons, and the storage time is one year
.
The funds required for collection and storage shall be borrowed by the enterprise from the bank in the form of product pledge
.
The provincial government arranges 1 billion yuan of special funds to partially discount bank loans for enterprise collection and storage
.
Among them, 80% interest subsidy will be given to enterprises that collect and store tin, germanium and indium; A 60% interest discount subsidy
will be given to enterprises that collect and store copper, electrolytic aluminum, lead and zinc.

3.
President of Peru: Extension of lockdown measures for two weeks, the new crown pneumonia epidemic has not yet reached its peak; Consideration is being given to resuming some economic activity
from May 4.

The demand side continues to pick up, coupled with downstream low-price replenishment, which promotes smooth domestic destocking
.
However, overseas is in the accumulation stage
due to the impact of the epidemic.
Although the epidemic situation in many overseas countries has improved, and the market has pushed up risk appetite based on the expectation of resuming work, the impact of the epidemic on the economy will continue, while the supply disruption will gradually recover, and the pattern of refined copper surplus will decline in the medium term
.
The short-term spot market and copper scrap problems still exist, as the follow-up epidemic slowly consumes, the focus of the market will return to the demand side, and the speed of destocking is expected to slow down
after a wave of replenishment and pre-order digestion by domestic enterprises in the early stage.
Under this judgment, copper prices are expected to show a volatile adjustment trend
.