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Copper prices remain relatively strong in the short term

 Last Update: 2022-12-20
 Source: Internet
 Author: User

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At the beginning of last week, due to the news of the domestic launch of new energy vehicle planning, the market showed a very optimistic attitude towards the future support of copper demand in the new energy sector, and copper prices rose sharply at the beginning of the week
.
Coupled with the US dollar index and US bond yields continued to fall last week, which made the previous constraints on copper prices higher factors have been resolved, copper prices strengthened sharply last week, and throughout the overall colored sector, varieties showed alternating rises, indicating that the market for non-ferrous varieties market outlook continues to be optimistic, so copper prices are expected to remain relatively strong this week
.

Copper prices

In terms of macro, the current global low interest rate and ultra-loose monetary policy is still more likely to continue in the future, and this is a very favorable factor for commodities, the current dollar is higher in the short term, but this is more affected by the Eurozone epidemic rebound, and in terms of monetary policy, the Fed does not have the conditions to immediately change the current ultra-loose monetary policy in the future, so the dollar rally may not be sustainable
.

In terms of fundamentals, due to the uncertainty of the impact of the epidemic in major producing countries such as Chile in the third quarter, coupled with the recent event that China may ban copper imports from Australia, these are more obvious supply-side disruptions
.

On the demand side, as the most important demand country, China is currently the most effective country in controlling the new crown epidemic
.
Therefore, it is expected that the probability of sustained recovery of domestic economic activity in the second half of the year is relatively high
.
Prior to this, State Grid set the 2020 power grid investment plan at 460 billion yuan, but as of the first half of the year, the actual investment amount of the power grid is far from reaching the standard, so there is also the possibility
of rushing work after that.
In addition, in the new energy vehicle sector, there is also a certain support for the demand for copper prices
.

In terms of spot, last Friday was affected by the surge in the market, trading activity declined, and trading volume shrank significantly
.
It is expected that the current social inventory will continue to be exported significantly, it is difficult to see the inflow of imported copper, and it is difficult to see structural changes
in the fundamentals in the short term.
Coupled with the international copper listing, continue to pay attention to inventory data and plate price spreads, it is expected that the discount will not be significantly lowered
in the short term.

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