1、 Trend analysis

As shown in the figure above, the copper price mainly fluctuated in a narrow range this week. By the end of the week, the spot copper price was 68670 yuan / ton, up 0.08% from 68616.67 yuan / ton at the beginning of the week, up 18.49% from the beginning of the year, and up 35.66% from the same period last year.

Since late June, copper prices have fluctuated between 67000-70000 yuan / ton. On July 5, the first batch of 20000 tons of copper was put on the market at the price of 67700 yuan / ton by the State Reserve Bureau. To some extent, the government’s dumping of reserves affected the rise of copper prices, but the overall impact was small.

With the popularization of vaccines, overseas copper supply has recovered from the epidemic, and the release of newly expanded copper production capacity in 2021 will be gradually reflected in the second half of the year. However, due to the political risks of Chile and Peru, the authorities’ attitude towards mining will affect the decision-making of capital expenditure of mining enterprises.

The output of refined copper in May was 866000 tons, a year-on-year increase of 10.2%; From January to may, the cumulative output was 4.244 million tons, with a cumulative year-on-year growth of 14.1%. In July, there was less maintenance in the refinery, the processing fee rebounded, the profit was fair, and the output of refined copper was expected to increase.

There was no significant increase in demand, and the copper output in May was 1.838 million tons, down 10.3% year on year; From January to may, the cumulative output was 8.206 million tons, and the cumulative year-on-year growth rate dropped to 3.5%.

To sum up, the macro situation in July was relatively stable, the supply of copper was gradually relaxed, the demand was relatively light, and the continuous rise of copper price showed insufficient momentum. Copper prices are expected to remain range bound in the short term.