The traditional off-season atmosphere is becoming more and more intense, and Shanghai copper has fallen into a high correction

On the supply side: Fears of supply disruptions have been revived by strikes at Chile's largest copper mine, Scondida, which will halt all shifts, while the LasBambas copper mine in Peru has seen mining operations decline due to community lockdowns to only reach 30% of capacity; According to data from the National Bureau of Statistics, the output of refined copper (electrolytic copper) in October 2022 was 953,000 tons, an increase of 10.
9% year-on-year; Although the increase in copper production capacity in October is still obvious, there are still refineries in the maintenance stage, coupled with the tight supply of crude copper, and the slow release of new capacity, the increase in electrolytic copper production is not large
month-on-month.
Coupled with the recent increase in global explicit inventories, the Shanghai copper warehouse receipt inventory increased more at the beginning of the week and once suppressed the trend of copper prices, but in the following days there was a slight downward trend, LME copper inventory growth at the beginning of the week jumped up, and the LME does not restrict Russian metals, but also reduces the risk of market squeeze
.
However, the availability of spot deliverable goods is still on the tight
side.

Demand: Copper prices have remained high recently, which has inhibited the release of demand to a certain extent and intensified the traditional off-season atmosphere
.
At the same time, the recent domestic epidemic has continued to spread, resulting in a decline
in downstream operating rates.
Among them, some projects of the State Grid and local infrastructure ports were moved to next year due to the epidemic, and the delivery volume of the State Grid fell seriously; The real estate industry dilemma is prominent, due to the constraints of development funds, land acquisition and new construction area reduction, resulting in the already weak and worse, the future real estate demand for copper or still not optimistic, but also trigger the butterfly effect, in the real estate downward cycle home appliance consumption, building materials consumption and electronics industry will perform malaise, and then drag down the prosperity of demand
.

Spot: Holders are strongly reluctant to lower prices, but downstream is unwilling to accept the reality of price increases, wait and see, still maintain a cautious buying mentality, and continue to wait for low-priced supplies, resulting in a deadlock in the market
.

Inventories: London copper stocks rose last week, accumulating an increase of 11,875 tons, or 15.
25%, to 89,750 tons
.
Shanghai copper stocks rose last week, accumulating an increase of 9,641 tons to 85,817 tons, an increase of 12.
66%
month-on-month.

At present, the macro pressure has increased, the early favorable factors have begun to digest, and China's manufacturing and property market data have both weakened, highlighting that the real estate industry is still in trouble, although there are national favorable policies to increase the weight, but the short-term reality is difficult to transmit.

On the supply and demand side, the LME does not restrict Russian metals, so that the market has reduced the risk of running positions, and the inventory of the two markets in London and Shanghai has grown sharply during the week and the long profit taking once suppressed copper prices, but the current Shanghai copper warehouse receipts show a high and slightly falling state, and the global explicit inventory is still at a historical low, which supports the price
.
However, the recent high copper price downstream procurement is limited, the trading volume continues to fall, the demand release is suppressed, the traditional off-season atmosphere is becoming more and more intense, it is difficult to support the copper price to continue to rise sharply, so Shanghai copper fell into a high correction
.