1、 Trend analysis

Copper prices have fluctuated and risen this week. As of the end of this week, the spot copper quotation is 66621.67 yuan/ton, an increase of 0.23% from the 66466.67 yuan/ton at the beginning of the week and a year-on-year increase of 6.05%.

According to the weekly rise and fall chart of Business Society, in the past three months, it has fallen by 5% and increased by 6%. Recently, copper prices have rebounded slightly after a decline.

LME copper inventory continues to climb, accumulating to a two-year high.

Macroscopically, Powell’s unexpected singing boosted expectations of suspending interest rate hikes, and international oil prices rose to a new high in nearly two weeks. Domestically, a series of economic data released shows that the economy is still on the path of stable growth.

On the supply side: In September, China’s electrolytic copper production reached 1.012 million tons, an increase of 23000 tons month on month, an increase of 2.3%, and a year-on-year increase of 11.3%; In October, due to holiday factors, the load of the smelting plant has decreased month on month, with an estimated output of 99.6 million tons in October, a decrease of 1.58% month on month and a year-on-year increase of 10.50%; In October, three smelting plants began to put into production, but only one actually increased. The other two will not have an increase until November. Therefore, it is expected that the domestic electrolytic copper production will return to over 1 million tons in November. The spot processing fee TC for imported copper concentrate continues to be high, and smelting enterprises are increasing production. The domestic supply of recycled copper is tight, the profit from imported recycled copper has expanded, and the price difference of refined waste has decreased, far below the breakeven point.

On the demand side: The rebound in terminal consumption is weak, but some companies are buying on dips to replenish their inventory. Last week, the operating rate of precision copper rods was 82.75, an increase of 3.37 percentage points compared to the previous week; The operating rate of recycled copper rods is 31.67%, with a decrease of 9.49 percentage points in the circumferential ratio.

In summary, LME’s explicit inventory has continuously increased, with a slight decrease in copper production in October and a slight rebound in demand, but still weak. There has been some improvement in the macro aspect, but overall, there is no particularly good news. Given that copper prices are currently at the bottom and there is a low rebound demand, it is expected that copper prices will mainly operate with strong short-term fluctuations.