The non-ferrous sector was under pressure as a whole, and the trend of Shanghai copper fell

On the macro front, the Fed raised interest rates by 50BP last week, in line with market expectations
.
In terms of balance sheet reduction, the interest rate statement mentioned that the balance sheet reduction began in June by up to $47.
5 billion, and the ceiling reached $95 billion
per month after three months.
After the Fed raised interest rates, the dollar experienced a slight retreat, but then returned to a strong pattern
.
This puts the colored plate under
pressure as a whole.
At the same time, with monetary policy gradually tightening and inflation remaining relatively high, the outlook for the future economy is still difficult to be optimistic
in the short term.
This also inhibits
the demand outlook for the non-ferrous sector.

In terms of the market, the average price of 1# electrolytic copper in the week of May 6 ran at 72,750 yuan / ton and 73,850 yuan / ton, and the average premium price ran at +220 to +320 yuan / ton, showing a shock decline in the middle of the week
.

In terms of stocks, LME stocks rose by 14,000 mt to 170,000 mt
last week.
SHFE stocks rose 0.
39 million mt to 52,300 mt
.
Social stocks were 120,000 tons (excluding bonded zones), up 09,400 tons
from the previous week.

On the supply side, domestic copper mine TC fell slightly last week, but remained high overall, indicating that the mine supply may still be relatively wide, while Zijin's Kamoa copper mine in Congo has achieved commercial mass production since April, so overall TC prices may remain relatively high
.
In terms of smelting, due to the impact of the epidemic, some refineries advanced maintenance to April, involving a total production capacity of 1.
5 million tons, and electrolytic copper production in April was 827,300 tons, down 2.
5% month-on-month and 5.
7%
year-on-year.
However, due to the current high TC price, the price of sulfuric acid has also risen to the level of 1,000 yuan / ton, so from the perspective of smelting profits, refiners will still have high production enthusiasm, so if the epidemic can be controlled relatively limited, then in terms of smelting output, copper prices may also have a certain inhibition
.
On the demand side, due to the impact of the current epidemic, the overall performance of demand is difficult to be optimistic, and the future market needs to pay attention to the investment in the infrastructure sector and the effect
of local support for real estate.

Overall, the current Fed interest rate hike environment is relatively unfavorable for copper prices, and although there are relatively strong expectations on the domestic demand side, whether such strong expectations can be fulfilled is the focus
of the future market.
Unilateral opportunities may be relatively difficult to grasp for the time being, but you can try to carry out internal and external arbitrage operations
against the background of the relatively pressure of the US dollar and the RMB.