Weighed down by weak demand, Shanghai copper's rally was limited

In terms of spot, on December 22, the trading price of CCMN Yangtze River spot 1# copper was reported at 66860-66900 yuan / ton, with an average price of 66880 yuan, up 450 yuan / ton; The premium was reported at 640-680 yuan / ton, and the average price was 660 yuan, up 90 yuan / ton
.
In the spot market, spot supply is in short supply, and holders continue to hold prices, and downstream traders are less willing to take goods in the face of high premiums, and transactions are
deadlocked.

On the supply side, according to data from the World Bureau of Metal Statistics (WBMS), the global copper supply shortage in the first 10 months was 693,000 tons; domestic copper concentrate processing fees are still hovering at a high level, smelter profits are better, but crude copper supply is limited, limiting production release space; in stocks, LME copper stocks continue to degrade, stocks fluctuate above 80,000 tons, domestic bonded zone inventory levels remain low, and warehouse receipt inventories flow out quickly to support short-term prices
.

On the demand side, due to the decline in copper prices in the early stage, the willingness to replenish downstream stocks has improved, and the premium has continued to rebound, but after the epidemic was fully liberalized, new cases soared, short-term market economic activities were impacted, and market worries reappeared
.
The number of workers employed by downstream processing enterprises has decreased, resulting in a weaker operating rate in the already sluggish operation, and as the year approaches, most enterprises choose to take an early holiday, making market consumption
weaker.

In summary, the US existing home sales data in November performed poorly, and it has fallen for ten consecutive months to create the longest consecutive decline in history, which has dragged down the US dollar and provided price support
for copper metal.
Domestic steady grasp of the economy to promote the implementation of policy measures and promote economic operation in a reasonable range, which will help promote the stable development of the market economy and encourage the return
of consumer demand confidence.
Fundamentally, global copper inventories are at historic lows, domestic refined copper production is less than expected, spot supply is still tight, and the rising water rebounds to a high level, providing short-term support
for prices.
However, domestic and foreign demand is still weak, and under the dual pressure of the epidemic and the traditional off-season, copper price growth is limited
.

Overall, macro bearish sentiment has been digested, market risk appetite has improved, the metal market has generally recovered, coupled with low inventory logic still provides support for copper prices, Shanghai copper is running strongly, but the rise is limited
by the sluggish demand.