Since mid-April, the main force of the Shanghai copper futures contract 1807 has maintained its overall turbulence, and the price hovered at 50,000 yuan/ton. The industry analysts analyze that in the short term, no special events will stimulate the price to remain volatile. However, with further destocking, with the consequent shortage of copper concentrate supply and weaker alternatives to scrap copper, in the long term, the price of copper will easily rise. fall.

Supply and demand two light copper prices

In the second quarter, the global copper price has always maintained a narrow range of fluctuations, and the characteristics of a balanced market are obvious. The lack of core drivers in the global economic engine rotation is a central factor in the current situation. The uneven economic operation of the three major economies in China, the United States and Europe, the expectation of the Federal Reserve Bank and the Bank of England raising interest rates in the second half of the year, the withdrawal of the Iranian nuclear agreement from the United States, the ups and downs of the geopolitical situation in the Middle East, and the continuous increase of LME and SHFE copper stocks , Each other grew longer and the price of copper fell into range fluctuations.

Industry analysts believe that copper prices have reached a relatively balanced node in the short term, both from supply and demand. From the demand point of view, the consumption of copper in China in the first quarter of this year has been weakened under the influence of factors such as the suppression of the real estate market and the further slowdown in the growth of the national grid investment. On the supply side, domestic refined copper production increased by 200,000 tons year-on-year in the first quarter of this year, and this year's new production capacity is mostly concentrated in the second half of the year, inevitably contributing to the speculation that the increase in refined copper will increase substantially throughout the year. At the same time, the current year's new construction projects are in good condition and have contributed much to the current increase in refined copper production. In the second half of this year, new projects are still put into production. As a result, the increase in smelting demand has increased.

Fubao Information stated in its research report that due to the recent trend of copper prices not showing obvious direction, downstream businesses are not worried that copper prices will rise too strongly.

"From the point of view of market supply, domestic domestic stocks in the domestic spot copper market have been relatively abundant recently. The current profit margins for imported copper are too high, temporarily curbing the impact of foreign electrolytic copper on the domestic spot copper market. The price willingness is also relatively strong, and the opinions of the supply and demand sides are quite different, and the asking price is very firm. The two sides are deadlocked and the short-term market transactions have reached a stalemate, Fubao said.

 Source: China Securities News