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In early May, copper prices fell sharply, once hitting a new low for the year, and then although the price rebounded, it still failed to get out of the low, and Shanghai copper as a whole maintained volatility
around the 45500 line.
For the future market, because the approach of the consumption off-season will weaken downstream demand, the increasingly tight domestic capital will also limit the downstream stocking sentiment, the weakening of the demand side is bound to be unfavorable to the price, so the later copper price trend should not be overly optimistic
.
On the macro front, although China's official manufacturing PMI index of 51.
2 in May was unchanged from the previous reading, the Caixin manufacturing PMI was only 49.
6 below the boom and bust line
.
Coupled with data from the Bureau of Statistics, China's industrial added value above designated size in April, total retail sales of consumer goods in April and urban fixed asset investment all showed a sharp year-on-year decline, and Moody's downgraded China's rating from Aa3 to A1, and revised its outlook to stable
.
As a result
, the market has to start worrying about China's future economic development.
It has formed a greater pressure on copper prices, resulting in a sharp decline in copper prices
.
Due to the recent increasingly strict regulation of domestic real estate, second-hand housing in first-tier cities has fallen in volume and price, and it is difficult for real estate to continue to maintain the momentum of rapid growth, which will inevitably have a certain harmful effect on domestic economic development, and the real estate industry as a copper head, will also directly weaken the future demand
for copper market.
Abroad, the US non-farm payrolls data for April was very bright, better than expected, and the unemployment rate hit a record low
in a decade.
This has greatly increased the expectation of a Fed rate hike, and coupled with the strong support expressed by many Fed executives, this makes the June rate hike almost a certainty
.
This still means that the dollar index may rebound strongly in the coming period, and copper prices are inevitably under pressure
.
In terms of industry, BHP Billiton said that it lifted the force majeure of Chile's Escondida copper mine more than one month after the end of the strike, and due to the 43-day strike, BHP Billiton announced force majeure at the world's largest copper mine in early February
.
It is estimated that the strike could cost BHP as much as $1 billion
.
In the short term, production capacity will be limited, which will have a positive effect on copper prices, but domestic demand will weaken and the expected effect will be limited
.
Overall, the strike is over, supply is still high, demand is insufficient, good news is basically exhausted, and there is likely to be a big negative
in June.
In the short term, this rally has ended, and copper prices have returned to a downward channel
.
