Analysis of copper price trend in Yangtze River spot market (5.3-5.6)

Macro aspect: Macro uncertainty increased
this week.
Data show that China's exports fell by 1.
8% year-on-year in April, and imports fell sharply by 10.
9% year-on-year, both of which were significantly worse than expected and the previous value, indicating that China's internal and external demand has slowed down
.
In addition, China's latest official and Caixin manufacturing PMIs for April were worse than expected and pre-emptive, highlighting that the economic recovery is not firmly on the ground
.
Abroad, the US economic growth rate is still weak, causing the Federal Reserve to slow down its interest rate hike process, and the United States, as the world's second largest copper consumer, the slowdown in economic growth will also drag down the copper market demand outlook, market caution is difficult to eliminate, copper prices are still under pressure
.

Market: After May Day, domestic copper prices fell continuously, while the domestic copper spot market became more active, and low prices led to a slight improvement
in transactions.
This week, due to frequent fluctuations in the US dollar and the continuous decline in copper prices, importers avoided risks, imported copper circulation decreased, and the supply was more obvious
than before May Day.
A direct merchant enters the market to purchase, and the enthusiasm of middlemen to move goods has also increased slightly, which is also caused by the decrease in the supply of electrolytic copper market
.
Overall, the market supply this week first tightened and then loosened, the market gradually resumed supply in the second half of the week, the market trading returned to a relatively cold state, except for on-demand procurement, most of them remained cautious and wait-and-see
.
At present, the peak consumption season is gradually coming to an end, due to the weak order situation throughout this year, the overall consumption of downstream manufacturers is slowing down, and it is difficult for the market to improve greatly in the short term
.

In terms of stocks: as of May 6, LME copper stocks reported 159025 tons, a weekly increase of 9,525 tons or 6.
37%, a two-week increase and a record level since March 17 this year; In the same period, the previous Shanghai copper inventory reported 313168 tons, a weekly increase of 1274 tons, returning to the level of early March, after the inventory fell for six consecutive weeks, with a cumulative decrease of 83083 tons or 21.
05%.

In recent days, LME inventories have continued to increase slightly, the market is worried about inventories or opening a growth mode, the pressure of oversupply in the global copper market is not reduced, and copper prices will still face greater pressure
in the later period.

Aftermarket analysis: This week's macro market favorable factors have plummeted, and economic data of various countries have weakened or even reversed to varying degrees, which is not conducive to the recovery
of copper prices.
In addition, the market over-interprets the factors that the consumption season will pass, which makes the market bearish atmosphere gradually thicken, dragging copper prices down
.
At present, copper prices have a recovery in demand, but the extent is limited, in the medium and long term, with the end of the copper demand season in May, and the macro favorable market long sentiment cooling, it is expected that if downstream demand declines rapidly after May, copper prices may continue to decline
.