April 3, 2019 Shanghai copper market
In terms of raw material supply, quotations continued to decline. Domestic companies reported that copper mines were not in short supply, but copper mines may fall below 70 under the expectation of tighter supply. At present, the spot TC is even lower than the annual long-term single floor price, and the profits of smelters are seriously damaged. BossMining will stop production this month due to depletion of oxide mines. The current smelter's inventory changes are small, indicating that the smelter is currently maintaining a tight balance between production and sales, and the copper produced overtime during the Spring Festival is still in inventory. Because of the strong wait-and-see mood downstream, they want to wait for the callback to make purchases.
In terms of spot, due to the situation of high premium quotations in March due to the reduction of value-added tax, the market quotation is expected to return to normal in April. Due to the lack of inquiry guidance at the beginning of the week, the market quotation will follow the price difference on the disk, and due to holding stock at the beginning of the month There is no shortage of funds for the merchants to ship, and it is expected that the high quotation will be firm for a period of time. In addition, the high premium quotations caused by the tax cut in March suppressed the market buying sentiment. After the quotations returned to normal in April, due to the needs of downstream production, the market will actively replenish the goods. Paying attention to the price difference of the disk next week will bring guidance to the spot quotation. It is estimated that the spot discount is 30-150 yuan / ton next week.
Copper prices rebounded from the bottom, downstream demand is still recovering slowly but market demand is expected to continue to increase. The domestic inventory accumulation this year has reached a high point, and the destocking period will be gradually carried out with the arrival of the peak demand season. However, due to the large amount of domestic exports of copper in the early stage, if these coppers are delivered, LME inventories may rise sharply, and copper prices also have certain uncertainties in the near future. It is expected that the London copper operating range is 6,200-6,400 US dollars / ton, and the Shanghai copper is 48,500-49,800 yuan / ton. Short-term macro news and market expectations will have a considerable impact on copper prices, and pay attention to domestic infrastructure investment.