I. Trend of spot copper price
As shown in the chart above, domestic copper prices rose first and then fell this week. At the beginning of the week, the average domestic spot copper price was 49,335 yuan/ton, while at the end of the week it was 49,071.67 yuan/ton, down 0.53%, down 3.38% year-on-year.
II. Copper Current Statement
As shown in the figure above, this week’s main contract price of copper is similar to the spot price trend, both rising first and then falling, but the main contract price is higher than the spot price, indicating that people expect copper prices to be good in the next two months.
II. Market Analysis
Supply: Codelco, the top copper producer, produced 11500 tons of copper in February, the lowest monthly output since January 2016, down 9.5% annually and 19.3% year-on-year. Among them, due to heavy rains in mines such as Chuquicamata and Radomiro Tomic, production in the North dropped to 50,500 tons. But the largest El Teniente copper mine in Codelco produced 34,600 tons in February, an increase of 4.8% annually. More supply disruptions occurred in the copper industry than in 2018, which may lead to insufficient supply in the market.
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Demand: According to CAAC data, the decline in passenger car production and sales in March has narrowed considerably, but it is still not optimistic, which may be a drag on the overall consumption of non-ferrous metals. Entering the second quarter, the peak season is approaching stronger demand, and the decline in copper stocks in the last two weeks seems to indicate the arrival of the peak season.
Inventory: Copper stocks in Lun fell mainly this week, with a cumulative decrease of 5 875 tonnes to 19 425 tonnes, a cumulative decrease of 2.96%.
Macroscopic: The IMF lowered global economic expectations, and the ECB stressed Wednesday that global economic growth was threatened, including Britain’s exit from Europe; the US threatened to impose tariffs on 11 billion US dollars of EU products; Europe threatened retaliation; the U.S. tariff war was on the horizon; trade tensions between the U.S. and the U.S. triggered demand concerns; and pressure on copper prices.
3. Prospects for the Future Market
In summary, copper analysts from the Nonferrous Branch of Business Association believe that copper prices are good in the anticipation of reduced supply and start-up of consumption, but still pressured by the global economic drag, copper prices will rise sharply, and copper prices are expected to remain high volatility in the short term.
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